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 extended their short-term consolidation on Wednesday, as the S&P 500 got back above the 4,400 level. Is this a bottoming pattern?
The broad stock market index gained 1.12% on Wednesday following its Tuesday’s decline of 0.3%, as it continued to fluctuate after the recent drop. There is still a lot of uncertainty concerning the Ukraine conflict and Fed’s monetary policy tightening plans. On Monday it led to a more pronounced profit-taking action. However, in the near term the coming quarterly earnings releases season may be a positive factor. This morning the broad stock market is expected to open 0.2% lower and we may see some more short-term uncertainty.
Futures Contract – Breakout Above the Trend Line?
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading slightly above the short-term downward trend line, and it remains above the support level of around 4,400.
Recently, our profitable long position was closed at the stop-loss (take-profit) level of 4,440. Overall, we gained 100 points on that trade in a little less than two months’ time (it was opened on Feb. 22 at 4,340 level). So now we will be waiting for another profit opportunity. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index is expected to open 0.2% lower this morning and it will likely extend a short-term consolidation. For now it looks like a relatively flat correction within a short-term downtrend.
Here’s the breakdown:
- The S&P 500 index trades within a short-term consolidation following the recent declines.
- Our profitable long position was closed at the 4,440 level (a gain of 100 points from the Feb. 22 opening).
- 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
