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 Monday’s rebound and extended their downtrend yesterday. Will the decline continue despite short-term oversold conditions?
The S&P 500 index lost 2.81% on Tuesday, as it fell below the 4,200 level. It went close to the mid-March local lows along the 4,175 level. Stocks extended their downtrend despite the quarterly corporate earnings releases. However, we’ve seen an overnight rebound following releases from MSFT and GOOG. There’s still a lot of uncertainty concerning the Fed’s monetary policy tightening fears and Ukraine conflict. This morning the S&P 500 index is expected to open 0.4% higher and we may see a consolidation along the 4,200 level.
Futures Contract – Increased Volatility
Let’s take a look at the hourly chart of the S&P 500 futures contract. Yesterday it fell to the previous local lows of around the 4,140 level. It’s the nearest important support level.
The market is technically oversold, but there have been no confirmed positive signals so far. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index suffered another big daily loss yesterday, as it fell below the 4,200 level. In the near term we will likely see a consolidation. Investors will wait for more important quarterly earnings releases this week. Today we will get the release from FB (Meta), and tomorrow from AAPL and AMZN.
Here’s the breakdown:
- The S&P 500 index extended its downtrend yesterday; we may see a consolidation along the 4,200 level.
- 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
