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 sold off on Friday and the S&P 500 index went the lowest since mid-March. Will the market come back to its late February low?
The S&P 500 index lost 2.77% on Friday following its Thursday’s decline of 1.5%. The market reversed sharply lower from the 4,500 level on renewed Fed’s monetary policy tightening fears. There’s also still a lot of uncertainty concerning the Ukraine conflict. This morning the S&P 500 index is expected to open 0.6% lower. However, we may see a short-term bottom and a rebound following the recent sell-off.
Futures Contract – Closer to Previous Lows
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Tuesday it broke above its short-term downward trend line and it retraced some of the recent declines. However, on Friday the market went back below the trend line and it accelerated towards the 4,200 level.
The market gets more and more oversold, but there have been no confirmed positive signals so far. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index accelerated its downtrend on Friday, as it fell the lowest since mid-March on Fed’s monetary policy tightening fears, among other factors. In the near term we will likely see a rebound or consolidation. Investors will wait for more important quarterly earnings releases this week. Tomorrow we will get the releases from GOOG, MSFT, on Wednesday from FB (Meta), and on Thursday from AAPL and AMZN.
Here’s the breakdown:
- The S&P 500 index is expected to open lower this mornings, however we may see a short-term rebound following last week’s sell-off.
- 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
