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 accelerated their downtrend on Friday, as the S&P 500 went to the 3,900 level. Are we getting close to a short-term bottom?
The S&P 500 index lost 2.91% on Friday following its Thursday’s decline of 2.4%, as investors reacted to higher-than-expected Consumer Price Index release. The market went closer to its May 20 low of 3,810.32. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy and the Russia-Ukraine conflict. Today, the S&P 500 is expected to extend its losses, as the futures contract is trading 2.3% lower.
Futures Contract – New Medium-Term Low
Let’s take a look at the hourly chart of the S&P 500 futures contract. It was trading within a consolidation above the 4,080 level last week, and on Thursday it broke lower. The nearest important support level is at around 3,800, marked by the previous low
We will wait for an upward reversal pattern before entering a speculative long position, and it may happen this week.
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 much lower again following global stock markets, crypto sell-off. So the market will further extend its last week’s breakdown.
Investors will be waiting for the Wednesday’s FOMC’s interest rate decision release.
Here’s the breakdown:
- The S&P 500 index is expected to open lower again; it may reach its late May local 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
