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 rallied up to their late June high yesterday. Will the uptrend continue? Or is this still just a consolidation?

The S&P 500 index gained 2.76% on Tuesday, as it broke above the 3,900 level. It retraced Monday’s decline of 0.8% despite some ongoing worries about inflation, tightening Fed’s monetary policy, Russia-Ukraine conflict and the quarterly earnings releases season. This morning the index is expected to open 0.3% lower and we will likely see some short-term uncertainty. For now, it looks like a consolidation within an uptrend.

Futures Contract is at Previous High

Let’s take a look at the hourly chart of the S&P 500 futures contract. Yesterday it came back to the late June local high of around 3,950. The resistance level is also at 4,000.

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 open slightly lower this morning. We may see a short-term profit-taking action. There have been no confirmed negative signals so far and for now it looks like a flat correction or a consolidation. Investors will wait for some further quarterly earnings releases. Today after the session’s close we will have a report from TSLA, among others.

Here’s the breakdown:

• The S&P 500 may fluctuate following its yesterday’s rally; for now it looks like a consolidation.
• 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