Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): No positions are currently justified from the risk/reward point of view.
The stock market continued to fluctuate within a two-week-long consolidation yesterday. We will likely see more uncertainty this morning – so is this still a topping pattern?
The S&P 500 index lost 1.08% on Wednesday, after bouncing from the 4,150 level. It extended its consolidation along the 4,100-4,150 following the late May rally. On May 20 it went to the medium-term low of 3,810.32 and it was 1,008.3 points or 20.9% below the Jan. 4 record high of 4,818.62. So technically, the broad stock market entered a bear market territory. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy and the Russia-Ukraine conflict. Today, the S&P 500 will likely open 0.3% lower this morning and we may see more uncertainty ahead of the next week’s Fed’s Rate Decision release.
Futures Contract – Narrowing Trading Range
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is still trading within a consolidation above the 4,080 level. For now, it looks like a flat correction following the late May rally.
In our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index is expected to open 0.3% lower this morning. The market will likely extend its short-term consolidation. However, it may be getting closer to a breaking out of its two-week-long trading range.
Investors will be waiting for June 15 FOMC’s interest rate decision.
Here’s the breakdown:
- The S&P 500 index remains within a consolidation following its late May rally.
- In our opinion, no positions are currently justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): No positions are currently justified from the risk/reward point of view.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
