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.
The S&P 500 index bounced up to the 4,200 level yesterday. Was it an upward reversal or just a correction within a downtrend? Powell’s speech is in focus this morning.
The S&P 500 index gained 1.41% on Thursday, as it retraced some of the recent decline. The market bounced up to the 4,200 level - a potential short-term resistance level. Today, we’ll likely see an increased volatility on the Fed Chair Powell’s speech at the Jackson Hole Symposium (10:00 a.m.).
In the first half of the month the S&P 500 was extending its two-month-long uptrend from the medium-term low of 3,636.87 (June 17) despite ongoing worries about inflation, tightening Fed’s monetary policy, Russia-Ukraine conflict. On Tuesday, August 16 it reached the local high of 4,325.28, and yesterday, the new local low fell at 4,119.97. This morning the S&P 500 index will likely open 0.1% lower, but it may see more fluctuations following the mentioned Powell’s speech.
Futures Contract Trades Along the 4,200 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. It bounced to the 4,200 level. The next resistance level is at 4,250-4,300, among others. On the other hand, the support level is at 4,100-4,120.
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 virtually flat this morning. Investors are waiting for the Fed Chief Powell speech and stock prices will certainly be volatile during that speech.
Here’s the breakdown:
- The S&P 500 index retraced some of the decline yesterday; for now, it looks like an upward correction.
- 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
