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 bounced from Wednesday’s low - was it a bottom?
The S&P 500 index gained 0.59% on Thursday as it retraced some of its recent sell-off. On Wednesday the broad stock market’s gauge was the lowest since early June - it went to the daily low of 4,238.63. Stocks continued lower after last Wednesday’s FOMC monetary policy release. There’s still a lot of uncertainty about monetary policy and economic growth.
Stocks will likely open 0.6% higher today. Investors’ sentiment improved following lower than expected Core PCE Price Index release (+0.1% vs. +0.2% m/m), among other factors. The S&P 500 went back to the 4,300 mark yesterday as we can see on the daily chart:
Futures Contract Is Above 4,350
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading above the 4,350 level after retracing some more of the recent declines. The support level remains at 4,280-4,300 and the resistance level is at 4,380-4,400.
Conclusion
The S&P 500 bounced from its Wednesday’s low but for now it looks like a correction or consolidation following the recent sell-off. However, the market may see more buying pressure.
Investors’ sentiment worsened following the FOMC Press Conference last week. Earlier it was improving as the pressure for further monetary policy tightening somewhat was easing.
Here’s the breakdown:
- Stocks extended their downtrend on Wednesday, but Thursday’s trading session was bullish.
- The S&P 500 bounced back to the 4,300 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
