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 fluctuations yesterday, as they retraced some of their Monday’s advance. Is this a bottoming pattern?
The S&P 500 index lost 0.81% on Tuesday, as it fluctuated after rallying from Friday’s low of 3,810.32. On Friday 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 has 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. This morning the S&P 500 index is expected to open 0.4% lower and we may see some more short-term uncertainty. The index will likely fluctuate above the 3,900 level.
Futures Contract – Still Below the Downward Trend Line
Let’s take a look at the hourly chart of the S&P 500 futures contract. It continues to trade below the downward trend line. The nearest important resistance level is at 3,980-4,000.
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 is expected to open 0.4% lower this morning. We may see some more short-term fluctuations following the bounce from Friday’s new medium-term low. For now, it looks like a consolidation or a flat correction within an advance. The markets will be waiting for today’s important Fed Minutes release at 2:00 p.m.
Here’s the breakdown:
- The S&P 500 index continues to fluctuate within a short-term consolidation; the market bounced from new medium-term low.
- 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
