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 fluctuated following its recent sell-off yesterday. Was it just a consolidation or some short-term bottoming and a potential upward reversal pattern?
The broad stock market index lost 0.22% on Tuesday, after a failed attempt at retracing some of its Monday’s 2.1% decline. The market is still reacting on U.S. dollar strength, global stock markets’ declines. 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 4,124.03. This morning the S&P 500 index will likely open virtually flat and it may extend a short-term consolidation ahead of tomorrow’s and Friday’s economic data releases.
Futures Contract Continues to Fluctuate
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke below the upward trend line on Monday and it went closer to the 4,100 level. The support level is at 4,080-4,100, and the resistance level remains at 4,200.
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 extend its short-term consolidation this morning. There have been no confirmed positive signals and it still looks like a consolidation within a downtrend.
Here’s the breakdown:
- The S&P 500 trades within a consolidation following its recent declines; the market will probably await tomorrow’s and Friday’s economic data releases.
- 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
