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.
The S&P 500 index fluctuated following its Friday’s rally yesterday. Will the uptrend continue? Or is this a short-term topping pattern before another leg down?
The broad stock market index lost 0.30% on Monday, as it remained close to the 3,900 level following Friday’s rally of 3.1%. Last week, the broad stock market retraced some of its recent declines after bouncing from the June 17 medium-term low of 3,636.87. On the previous Friday it was 1,181.75 points or 24.5% below its Jan. 4 record high of 4,818.62.
This morning the index is expected to open 0.3% higher and we may see a short-term consolidation along the 3,900 level. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy, Russia-Ukraine conflict and the coming quarterly earnings releases season.
Futures Contract Fluctuates Along the 3,900 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above a short-term downward trend line on Friday and it went to the 3,900 level. The market is now trading within a short-term consolidation. For now, it looks like a flat correction within an uptrend.
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 0.3% higher this morning, and we may see more consolidation following Friday’s 3% rally. There have been no confirmed negative signals in the short-term.
Here’s the breakdown:
- The S&P 500 index will likely open higher this morning; we may see some more fluctuations along the 3,900 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
