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 extended their consolidation on Tuesday, as the S&P 500 got closer to the recent highs again. But the market is expected to lower today. Is this a topping pattern?
The S&P 500 index gained 0.95% on Tuesday after bouncing from the 4,100 level again. The broad stock market extended its short-term consolidation along the 4,100-4,150 level. On May 20 it went to the medium-term low of 3,810.32 and it was 1,008.3 points or 20.9% below the Jan. 4 record high of 4,818.62. So technically, the broad stock market entered a bear market territory. 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 open 0.6% lower and we will likely see more uncertainty ahead of the next week’s Fed’s Rate Decision release.
Futures Contract – Short-Term Consolidation
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading within a consolidation above the 4,080 level. For now, it looks like a flat correction following the late June rally.
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 is expected to open 0.6% lower today, so we will see some further uncertainty following the late June advance.
Investors will be waiting for June 15 FOMC’s interest rate decision.
Here’s the breakdown:
- The S&P 500 index will likely extend its short-term consolidation today.
- 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
