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 advance on Thursday and the S&P 500 index broke above the downward trend line. Is the market reversing its two-month-long downtrend?
The S&P 500 index gained 1.99% on Thursday, as it extended its Wednesday’s gain of around 1%. The index continued to rally from last Friday’s low of 3,810.32. On Friday a week ago it was 1,008.3 points or 20.9% below the Jan. 4 record high of 4,818.62. So technically, the broad stock market has entered a bear market territory. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy and the Russia-Ukraine conflict. This morning the S&P 500 index is expected to open 0.7% higher following quite favorable economic data releases.
Futures Contract is at Previous High
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above the downward trend line yesterday. This morning it is trading along the recent local high of around 4,080.
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 is expected to open 0.7% higher this morning and it will likely get closer to the 4,100 level. The broad stock market remains within a potential medium-term bottoming pattern.
Here’s the breakdown:
- The broad stock market will likely extend its short-term advance this morning; the S&P 500 index may break above the 4,100 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
