Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and no positions are currently justified from the risk/reward point of view.

The S&P 500 bounced back closer to 4,100 – where will it go after the Fed?

The S&P 500 index gained 1.46% on Tuesday, as it retraced most of the recent decline. It closed the highest since mid-December following earnings releases, and ahead of today’s important FOMC release. Last week the index extended its bounce from January 19 local low of 3,885.54 and it retraced most of the December’s decline.

Stocks are expected to open 0.4% lower this morning, so they’ll see a downward correction and an uncertainty. The markets will be waiting for the mentioned Fed release and more important earnings releases. The S&P 500 remains below the 4,100 resistance level, as we can see on the daily chart:

Futures Contract – Still Above the Trend Line

Let’s take a look at the hourly chart of the S&P 500 futures contract. It came back closer to the 4,100 resistance level. The support level remains at 4,000, among others.

Conclusion

The S&P 500 will likely retrace some of its yesterday’s advance this morning. The market will be waiting for economic data releases at 10:00 a.m. and a very important FOMC release at 2:00 p.m. to be followed by the FOMC Press Conference at 2:30 p.m. For now, it looks like a consolidation within an uptrend.

Here’s the breakdown:

• The S&P 500 index retraced its recent declines ahead of today’s Fed release.
• Investors will be waiting for economic data, earnings.
• In my opinion, the short-term outlook is neutral and no positions are justified from the risk/reward point of view.

As always, we’ll keep you, our subscribers, well-informed.

Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and 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