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 accelerated the downtrend on Friday – will it break below the early Oct. lows?
The S&P 500 index lost 1.26% on Friday as it further accelerated the downtrend on rising international tensions, interest rates fears. In early last week the market bounced from 4,400 level and on Friday it traded as low as 4,224.
Recently stocks were rallying from their local lows along 4,220 level and in the previous week on Tuesday the index reached a local high of 4,394. There’s still a lot of uncertainty about monetary policy, economic growth and geopolitics.
Stocks will likely open 0.4% lower today, so the S&P 500 index is expected to get closer to the 4,200 level. Recently it failed to get back above the Sept. 21 daily gap down of 4,375.70-4,401.38 as we can see on the daily chart:
Futures Contract Trades Along Previous Lows
Let’s take a look at the hourly chart of the S&P 500 futures contract. Today it’s trading below the 4,250 level. The resistance level remains at 4,300, among others. On the other hand, the support level is now at around 4,200.
Conclusion
The S&P 500 will likely extend its downtrend this morning. However, it may be getting closer to a short-term bottom and a possible rebound or an upward correction following recent declines. The market will be waiting for more quarterly earnings announcements this week. Tomorrow we will get important releases from GOOG, MSFT, among others.
Here’s the breakdown:
- Stocks will likely extend their short-term downtrend this morning..
- The S&P 500 bounced from 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
