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.
The S&P 500 index backed off from its Tuesday’s high yesterday. Is this a topping pattern or just consolidation before another leg up?
The broad stock market index lost 0.72% on Wednesday, as it retraced its Monday’s-Tuesday’s advance. The S&P 500 got back below the 4,300 from Tuesday’s high of 4,325.28. On Tuesday it was the highest since late April. The S&P 500 has been extending its two-month-long uptrend from the medium-term low of 3,636.87 (June 17) despite ongoing worries about inflation, tightening Fed’s monetary policy, Russia-Ukraine conflict. This morning the index is expected to open 0.1% higher and we may see more short-term fluctuations.
Futures Contract Remains Below the 4,300 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading within a short-term consolidation following its recent advances. The resistance level remains at around 4,300-4,330, and the support level is at 4,200-4,250, among others.
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 virtually flat this morning. We may see some further short-term fluctuations following recent rallies. For now, it looks like a consolidation within an uptrend.
Here’s the breakdown:
- The S&P 500 will likely extend a short-term consolidation this morning; for now it looks like flat correction of the uptrend.
- 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
