Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27).
Stock prices rallied again on Friday – are they about to take a breather?
The S&P 500 index gained 0.94% on Friday, as it further extended its “V”-rally from October 27 local low of 4,103.78. On Friday it reached new local high of 4,373.62 before retreating a little bit before the close. The market reacted to weaker-than-expected monthly jobs data, among other factors. In October it kept selling-off on geopolitical uncertainty, strong U.S. dollar.
In early October stocks were rallying from their local lows along 4,220 level and on October 17 the index reached a local high of 4,394. There’s still a lot of uncertainty about monetary policy, economic growth and geopolitics.
Stocks are expected to open 0.2% higher today. So the S&P 500 index will likely trade within a consolidation for some time. The index went closer to 4,400 level on Friday as we can see on the daily chart:
Futures Contract Trades Sideways
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Friday it accelerated the uptrend and it went closer to 4,400 level. The resistance level is now at 4,400 and the support level is at 4,340, among others.
Conclusion
The S&P 500 will likely open slightly higher today. On Friday the sentiment improved following worse than expected jobs data, but today the market may take a breather. The index may see a consolidation or a downward correction at some point.
Here’s the breakdown:
- The S&P 500 went closer to 4,400 level again.
- There may be some short-term uncertainty following last week’s rally.
- In my opinion, the short-term outlook is still bullish and long positions are still justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
