After moving below yesterday's intraday low, the S&P 500 is showing signs of steady recovery within the range of yesterday's intraday swings. In other words, the uptrend can't be considered as renewed, despite the mildly positive HYG ETF performance.

We're seeing a daily consolidation after yesterday's sizable downswing, and it would be yet premature to ascribe it a bullish meaning.

What are the scenarios I am looking for in the very short run? Moving back below the above-mentioned intraday mid-range (with more selling to come), or muddling through around / peeking above the upper part of that intraday range (3010 to 3050).

The narratives are still there, now also with more Texas reopening on hold. It wouldn't be advisable from the risk-reward perspective to seek an exit from the current short position when the downside potential remains still considerable (the 200-day moving average might not hold indefinitely).

The open short position remains justified as a result.but let's move the stop-loss a bit higher should the bulls get an unlikely headline-based ally - one that wouldn't be able to reverse the downtrend in HYG ETF.

Please see the Trading position section for details.

Trading position (short-term; our opinion): short positions (100% position size) with stop-loss at 3180 and initial downside target at 2990 are justified from the risk-reward perspective.

Thank you.

Monica Kingsley
Stock Trading Strategist
Sunshine Profits: Analysis. Care. Profits.