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).
S&P 500 continues to fluctuate below the 4,400 level – which direction is next?
The S&P 500 index gained 1.06% on Monday as it retraced all of the Thursday’s-Friday’s declines. The market advanced despite geopolitical risks due to Israel-Hamas war and it reached closer to the 4,400 level again.
Recently stocks were rallying from their local lows along 4,220 level and a week ago on Tuesday the index traded as high as 4,385. There’s still a lot of uncertainty about monetary policy, economic growth and geopolitics.
Stocks will likely open 0.6% lower today following better-than-expected Retail Sales number release. It was at +0.7% vs. the expected +0.3% m/m. So the broad stock market index will continue to trade below the Sept. 21 daily gap down of 4,375.70-4,401.38 as we can see on the daily chart:
Futures Contract Trades Below 4,400
Let’s take a look at the hourly chart of the S&P 500 futures contract. Today it’s trading below the 4,400 level again as markets react negatively to economic data. The resistance level remains at 4,420-4,440 and the support level is at 4,350.
Conclusion
The S&P 500 is expected to open lower today, so stock prices will extend their short-term consolidation after bouncing from their early October lows.
For now, it looks like a flat correction within a short-term uptrend. The market will be waiting for the coming quarterly earnings announcements this week, including releases from TSLA and NFLX tomorrow.
Here’s the breakdown:
- Stocks will continue to fluctuate as the market awaits quarterly earnings releases.
- The S&P 500 remains below its late September daily gap down; it acts as a resistance level.
- In my opinion, the short-term outlook is still bullish and long positions are still 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).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
