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 reversed its short-term advance yesterday after hitting 3,900 level again. Will we see some more sideways trading action?

The broad stock market index lost 0.84% on Monday, as it retraced some of its recent advance. The S&P 500 index bounced from the 3,900 level again and it continued to fluctuate within a month-long consolidation. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy, Russia-Ukraine conflict and the quarterly earnings releases season. This morning the S&P 500 index is expected to open 0.7% higher and we’ll likely see an attempt at getting back to the 3,900 resistance level.

Futures Contract Continues to Fluctuate

Let’s take a look at the hourly chart of the S&P 500 futures contract. It is still trading within a consolidation along the 3,850 level. The resistance level remains at 3,900-3,950.

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 0.7% higher this morning and it may see an attempt at breaking above the 3,900 level again. The broad stock market keeps extending its consolidation, as investors await quarterly corporate earnings releases.

Here’s the breakdown:

• The S&P 500 is expected to open higher; the resistance level remains at 3,900-3,950.
• 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