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).
Stocks extend their short-term consolidation – which direction is next?
The S&P 500 index lost 0.01% on Tuesday as it remained below the 4,400 level. On Monday it retraced its last week’s Thursday’s-Friday’s declines. The market advanced despite geopolitical risks due to Israel-Hamas war and it reached closer to the 4,400 level again. Yesterday the daily high was at around 4,394.
Recently stocks were rallying from their local lows along 4,220 level and last week on Tuesday the index traded as high as 4,385. There’s still a lot of uncertainty about monetary policy, economic growth and geopolitics.
Stocks are expected to open 0.5% lower today. So the broad stock market index will continue to trade below the Sept. 21 daily gap down of 4,375.70-4,401.38 as we can see on the daily chart:
Futures Contract Is Below 4,400 Again
Let’s take a look at the hourly chart of the S&P 500 futures contract. Today it’s trading below the 4,400 level again after bouncing up to 4,420 level. The resistance level remains at 4,420-4,440 and the support level is at 4,350, among others.
Conclusion
The S&P 500 will likely extend its short-term consolidation. It still looks like a flat correction within an uptrend. The market will be waiting for the coming quarterly earnings announcements this week, including today’s releases from TSLA and NFLX. These reports will be released after the session’s close.
Here’s the breakdown:
- Stocks will extend a consolidation as market awaits quarterly earnings releases.
- The S&P 500 remains below its late September daily gap down; it is still acting 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
