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 reached new yearly high on Friday, but will it continue the uptrend?

The S&P 500 index gained 0.41% on Friday as investors reacted to better-than-expected monthly jobs data release, among other factors. The market has slightly extended its uptrend after breaking above 4,600 level. The daily high of the index was at 4,609.23. S&P 500 went slightly above its July 27 high and it was the highest since late March of 2022. Investors’ sentiment is still bullish despite interest rates uncertainty, mixed economic data.

Recently the S&P 500 broke above the resistance level marked by the technically important August 2 daily gap down of 4,551-4,568. The market resumed its rally from October 27 local low of 4,103.78. On Friday it broke slightly above its July local high of 4,607.

Stocks are expected to open 0.1% lower this morning. So there may be some profit-taking action following Friday’s advance. The market will be waiting for the important economic data releases in the next two trading days. Tomorrow we will get the CPI release, and on Wednesday PPI number and the important FOMC Statement release. The S&P 500 is trading along 4,600 level as we can see on the daily chart:

Futures Contract Trades Along Local High

Let’s take a look at the hourly chart of the S&P 500 futures contract. The March contract series was well above 4,600 level on Friday and today it’s trading along 4,650. The support level remains at 4,580-4,600, among others.

Conclusion

Today the S&P 500 will likely fluctuate following its recent advances. It still looks like a relatively flat correction following mid-November rally, however the index went the highest in more than one and a half year on Friday. There have been no confirmed negative signals so far, but the market may see a downward correction at some point.

Here’s the breakdown:

• The S&P 500 was the highest since March of 2022 on Friday.
• There may be a downward correction at some point.
• 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