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).
S&P 500 retraced some of its recent advances yesterday – is the uptrend over?
The S&P 500 index lost 0.62% on Thursday as it went closer to the 4,350 level. Recently stock were rallying from their last week’s local lows. On Friday the index broke above the 4,300 level after the monthly jobs data release. It bounced from 4,220 level and on Tuesday it traded as high as 4,385. There’s still a lot of uncertainty about monetary policy, economic growth and geopolitics.
Stocks will likely open 0.2% higher today. So the S&P 500 is expected to extend a short-term consolidation. The index remains close to its Sept. 21 daily gap down of 4,375.70-4,401.38 as we can see on the daily chart:
Futures Contract Trades Slightly Below 4,400
Let’s take a look at the hourly chart of the S&P 500 futures contract. Last week on Tuesday it reached new low of around 4,235 before bouncing back above the 4,300 level. This morning it’s trading below the 4,400 level. The resistance level is at 4,420-4,440 and the support level remains at 4,350.
Conclusion
The S&P 500 is expected to open higher and to extend its short-term consolidation. So it may see some more short-term uncertainty. For now, it looks like a flat correction within a short-term uptrend. The market will be waiting for more quarterly earnings announcements.
Here’s the breakdown:
- Stocks will likely continue sideways as markets await more important earnings releases next week..
- The S&P 500 trades close to the late September daily gap down; it acts as a resistance level.
- 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
