Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): short positions with an entry at the 4,435 price level, with 4,520 as a stop-loss and 4,200 as a price target.
The S&P 500 reached a new record high yesterday, but it gained just 0.2%. Is the market able to break even higher or is it running low on fuel?
The market got close to the 4,500 price level as investors awaited the Jackson Hole Symposium, which begins today. Tomorrow we will get a speech from Fed Chair Jerome Powell.
The nearest important support level of the broad stock market index is still at 4,450. On the other hand, the resistance level is at 4,500. The S&P 500 bounced from its four-month-long upward trend line last week, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):
Short Position Still in Play
Let’s take a look at the hourly chart of the S&P 500 futures contract. We opened a short position on August 12 at the level of 4,435. The position was profitable before the recent run-up. We still think that a speculative short position is justified from the risk/reward perspective. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index reached another new record high yesterday, gaining 0.2%. The market will most likely turn south again and extend its weeks-long consolidation. Therefore, we think that the short position is justified from the risk/reward perspective.
Here’s the breakdown:
- The market reached a new record high as it got to the 4,500 mark.
- Our speculative short position is still justified from the risk/reward perspective.
- We are expecting a 5% or bigger correction from the new record high.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): short positions with an entry at the 4,435 price level, with 4,520 as a stop-loss and 4,200 as a price target.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
