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 extended their short-term consolidation on Thursday. Today the stock market will likely open higher on better-than-expected Retail Sales number release. But is the downtrend over?

The S&P 500 index lost 0.30% on Thursday despite a lower opening of the trading session after higher-than-expected Producer Price Index release. The daily low was at 3,721.6, so the market extended its recent decline before bouncing back closer to the 3,800 level. Last week it bounced down from the 3,900-3,950 resistance level.

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. This morning the S&P 500 index is expected to open 1.0% higher on better-than-expected Retail Sales release (+1.0% vs. +0.9% m/m)

Futures Contract Remains Within a Consolidation

Let’s take a look at the hourly chart of the S&P 500 futures contract. It bounced from the support level of around 3,750 again. On the other hand, the resistance level remains at 3,900-3,950.

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 will likely open 1.0% higher this morning. We may see an attempt at breaking above the recent local highs.

There’s still a lot of uncertainty ahead of the coming quarterly earnings releases though.

Here’s the breakdown:

• The S&P 500 index extended its short-term fluctuations yesterday; Today we may see an attempt at reversing the downtrend.
• 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