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.
Monday’s trading session didn’t bring much change for the S&P 500 index. Stocks are expected to open lower this morning, so we will likely see even more uncertainty.
The S&P 500 index gained 0.31% on Monday, as it extended a short-term consolidation along the 4,100-4,150 level. The broad stock market is extending its consolidation after the previous week’s rally. Last Thursday’s daily high was at 4,177.5. On May 20 it went to the medium-term low of 3,810.32 and it was 1,008.3 points or 20.9% below the Jan. 4 record high of 4,818.62. So technically, the broad stock market entered a bear market territory. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy and the Russia-Ukraine conflict. Today, the S&P 500 is expected to open 0.9% lower, so we will likely see more short-term fluctuations.
Futures Contract Trades Below the 4,100 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. It has been reaching the 4,200 level recently. It is trading within a short-term consolidation following the previous advance, but this morning the market is closer to the support level of around 4,180.
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 0.9% lower this morning following global stock markets’ weakness, strengthening U.S. dollar, among other factors. So we may see more uncertainty and a short-term consolidation.
Investors will be waiting for June 15 FOMC’s interest rate decision.
Here’s the breakdown:
- The S&P 500 index may see a lower opening this morning; it’s expected to open below the 4,100 level.
- 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
