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 retraced their recent advance yesterday on news concerning further Russia-Ukraine tensions. Will the market extend the downtrend today?

The S&P 500 index lost 2.12% on Thursday, Feb. 17, as it retraced its Monday’s-Tuesday’s rebound from the local low of 4,364.84. The broad stock market’s gauge bounced from the 4,500 level on Wednesday and yesterday it fell below the 4,400 level again. The market remains above its late January consolidation, but bears are on the run and we may see an attempt at breaking below the support levels.

This morning the S&P 500 index is expected to open 0.1% lower and it may reach the mentioned Monday’s daily low. There have been no confirmed positive signals so far. However, the coming long holiday weekend may lower volatility.

The nearest important resistance level is now at 4,400-4,425, marked by the recent support level. On the other hand, the support level is at 4,300-4,350, among others. The S&P 500 index is closer to the late January consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):

Futures Contract Extends its Downtrend

Let’s take a look at the hourly chart of the S&P 500 futures contract. It reversed its short-term uptrend last week, and on Monday it traded as low as 4,360. This morning it’s closer to that level again.

In our opinion, no positions are currently justified from the risk/reward point of view. We are waiting for a potential speculative long position entry, but at lower levels or after some more consolidation. (chart by courtesy of http://tradingview.com):

Conclusion

The S&P 500 index will likely open 0.1% lower this morning, following an overnight rebound, as the Russia-Ukraine tensions rule the news again. If the market breaks below its Monday’s low, we may see another intraday decline.

Here’s the breakdown:

• The S&P 500 index retraced its advance from the Monday’s daily low; there’s still a downward pressure following Russia-Ukraine conflict news.
• 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