Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27).
Stocks fluctuated on Monday – will they resume the downtrend?
The S&P 500 index gained 0.01% on Monday as it remained below the 4,300 level. Recently the broad stock market index retraced some of the declines, but eventually it went below the 4,300 level again. On Wednesday the S&P 500 was the lowest since early June - the daily low was at 4,238.63. Stocks continued selling off after the previous Wednesday’s FOMC monetary policy release. There’s still a lot of uncertainty about monetary policy and economic growth.
The S&P 500 will likely open 0.5% lower today. So the market may get close or break below its last week’s low. The index continues to fluctuate following the recent sell-off as we can see on the daily chart:
Futures Contract Is Close to 4,300
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading along the 4,300 level. The support level remains at 4,280-4,300 and the resistance level is now at 4,340, among others.
Conclusion
Stocks continue to trade within a week-long consolidation following their recent declines. Today the S&P 500 index is expected to open lower so it may see an attempt at breaking below its last week’s low.
Investors’ sentiment worsened following the September 20 FOMC Press Conference. Earlier it was improving as the pressure for further monetary policy tightening was somewhat easing.
Here’s the breakdown:
- Stocks extended their downtrend last week; the market may see more uncertainty.
- In my opinion, the short-term outlook is still bullish and long positions are still justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
