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).
Stock prices were advancing after the CPI data, but will the uptrend continue today?
The S&P 500 index gained 0.74% on Wednesday as it accelerated its Tuesday’s advance following slightly lower than expected Consumer Price Index release. The broad stock market index reached new medium-term high of 4,488.34 yesterday. Last week on Thursday the market retraced its recent rally and it closed the previous Friday’s daily gap up.
There is still a lot of uncertainty concerning monetary policy, some technology stocks’ valuation concerns, but the investors’ sentiment remains bullish.
Stocks are expected to open 0.4% higher this morning, so the S&P 500 will get close to its yesterday’s intraday high again. The market remains above an over month-long upward trend line as we can see on the daily chart:
Futures Contract Trades Along New High
Let’s take a look at the hourly chart of the S&P 500 futures contract. Yesterday it broke above the 4,500 level and this morning it’s trading at a new medium-term high and above the 4,520 level. The nearest important support level is now at around 4,500.
Conclusion
The S&P 500 index will likely extend get back to its yesterday’s new medium-term high of 4,488.34 following slightly lower than expected Producer Price Index release. Investors will be also waiting for the coming quarterly corporate earnings releases.
There have been no confirmed negative signals so far. The recent fluctuations looked like a relatively flat correction within an uptrend. However, the market may see a more pronounced profit taking action at some point.
Here’s the breakdown:
- The S&P 500 will get closer to the important 4,500 level today.
- There have been no confirmed negative signals.
- In my opinion, the short-term outlook is 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
