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).
Stocks went sideways yesterday – is this just a pause before another leg up?
The S&P 500 index gained 0.18% yesterday as it fluctuated following its rally from the October 27 local low of 4,103.78. On Friday it reached new local high of 4,373.62 and yesterday it remained within the Friday’s trading range. In October the market kept selling-off on geopolitical uncertainty, strong U.S. dollar and last week it rallied closer to the 4,400 level again.
In early October stocks were advancing from their local lows along 4,220 level and on October 17 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 0.2% lower today. So the market may see more short-term uncertainty after its last week’s “V” rally. The index is within its mid-October consolidation as we can see on the daily chart:
Futures Contract Trades Sideways
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Friday it accelerated the uptrend and it was closer to 4,400 level. The resistance level is at 4,400 and support level is at 4,340, among others.
Conclusion
The S&P 500 is expected to remain within a short-term consolidation this morning. On Friday the sentiment improved following worse than expected jobs data, but this week the market is taking a breather. The index may see a consolidation or a downward correction at some point.
Here’s the breakdown:
- The S&P 500 remains below 4,400.
- There may be some more short-term uncertainty following last week’s rally.
- 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
