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 before session’s open).

Stocks continued their sell-off on Friday – is short-term bottom in sight?

The S&P 500 index lost 1.45% on Friday following its Thursday’s decline of 1.9% as it reacted to the ongoing U.S. banking crisis. Stocks extended their downtrend on news about the troubled Silicon Valley Bank (SIVB). On Friday the daily low was at 3,846.32 and the index was the lowest since early January.

This morning the S&P 500 index will likely open 1.2% lower, so it will further extend its sell-off. The market will get close to its late December consolidation as we can see on the daily chart:

Futures Contract Accelerates the Downtrend

Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading at new local lows. The resistance level is now at around 3,900-3,920, among others (June S&P futures contract).

Conclusion

Stocks will extend their downtrend this morning as investors continue to react to the U.S. banking crisis. The market may be forming a short-term bottom here, however, there have been no confirmed positive signals so far.

Here’s the breakdown:

• The S&P 500 will extend its sell-off this morning, however, it may be very close to a short-term bottom.
• In my opinion, the short-term outlook is bullish and long positions are 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 before session’s open).

Thank you.

Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care