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 went sideways on Monday and this morning it is expected to open virtually flat again. Is this a short-term bottoming pattern?

The broad stock market index lost 0.02% on Monday, as it closed slightly below the 4,400 level. It traded along its last week’s local lows yesterday. There’s still a lot of uncertainty concerning the Ukraine conflict and Fed’s monetary policy tightening plans. This morning the S&P 500 index is expected to open virtually flat and we may see a short-term consolidation along the 4,400 level.

The nearest important resistance level is now at around 4,450-4,500, marked by the recent support level and last Monday’s daily gap down. On the other hand, the support level is at around 4,350. The S&P 500 index continues to trade below the downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):

Futures Contract Remains Close to the 4,400 Level

Let’s take a look at the hourly chart of the S&P 500 futures contract. It continues to trade along the short-term downward trend line following last Wednesday’s failed breakout.

Recently, we closed a speculative long position with a gain of 100 points and we are waiting for another profit opportunity. (chart by courtesy of http://tradingview.com):

Conclusion

The S&P 500 index is expected to open virtually flat this morning. We will likely see some more short-term uncertainty. The broad stock market’s gauge may be trading within a bottoming pattern, however, there have been no confirmed positive signals so far. Investors will be waiting for the quarterly earnings releases. Today we will get the releases from NFLX and tomorrow from TSLA, among others.

Here’s the breakdown:

• The S&P 500 index is likely to open virtually flat again.
• 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