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.
Stocks bounced from their Monday’s lows yesterday, as the S&P 500 index went closer to its recent local highs again. Is this a short-term bottoming pattern?
The S&P 500 index gained 1.61% on Tuesday after breaking above the 4,400 level and bouncing from its Monday’s local low of around 4,370. Investors were buying stocks ahead of the quarterly earnings releases. There’s still a lot of uncertainty concerning the Ukraine conflict and Fed’s monetary policy tightening plans. This morning the S&P 500 index is expected to open 0.4% higher despite a negative reaction to yesterday’s earnings release from NFLX.
Futures Contract Broke Above the Trend Line
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above its short-term downward trend line yesterday and it retraced some of the recent declines. For now, it looks like an upward correction or a consolidation along the 4,450 level.
Recently, we closed a speculative long position with a gain of 100 points and we are waiting for another profit opportunity. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index is expected to open 0.4% higher this morning. The market will likely extend its yesterday’s advance. However, we may see a consolidation if the index gets closer to the 4,500 level.
Investors will be waiting for the quarterly earnings releases. Today we will get the release from TSLA, among others.
Here’s the breakdown:
- The S&P 500 index will likely extend its yesterday’s advance and it may get close to the 4,500 level.
- 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
