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 retraced their Friday’s rally yesterday. Will the market continue towards its recent lows? Or is this just a downward correction or a consolidation?
The S&P 500 index lost 2.01% on Tuesday, as it bounced from the 3,900 level and retraced most of the Friday’s rally. Last week, the broad stock market retraced some of its recent declines after bouncing from the June 17 medium-term low of 3,636.87. On the previous Friday it was 1,181.75 points or 24.5% below its Jan. 4 record high of 4,818.62.
This morning the index is expected to open virtually flat and we may see a short-term consolidation. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy, Russia-Ukraine conflict and the coming quarterly earnings releases season.
Futures Contract Went Closer to 3,800 Level Again
Let’s take a look at the hourly chart of the S&P 500 futures contract. It retraced most of the recent advance, but it’s still trading along the previous local highs of around 3,800-3,840. For now, it looks like a downward correction.
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 virtually flat this morning following slightly worse than expected U.S. GDP number release. We will likely see a short-term consolidation above the 3,800 level.
Here’s the breakdown:
- The S&P 500 index retraced most of its Friday’s rally; for now, it looks like a downward correction.
- 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
