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 short-term gains on Monday, as investors’ sentiment remained bullish ahead of the quarterly earnings releases. But will we see more advances?

The S&P 500 index gained 1.14% on Monday following its Friday’s rally of 2.7%. Last week the market fluctuated on mixed economic data releases, fear concerning Central Banks’ tightening monetary policies, Russia-Ukraine war and an energy crisis. On Thursday the index bounced from the new medium-term low of 3,491.58, and yesterday it went as high as 3,762.79. This morning we’ll likely see a lower open. There may be some intraday profit-taking action and a downward correction. Investors will wait for the quarterly earnings release from TSLA, due today after the session’s close.

Futures Contract Remains Below 3,800

Let’s take a look at the hourly chart of the S&P 500 futures contract. It went closer to the resistance level of 3,800 yesterday. It may see some more short-term uncertainty and a profit-taking action.

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 0.7% lower this morning. So, there’s still a lot of uncertainty and the stock market keeps extending its consolidation following September’s decline.

Here’s the breakdown:

• S&P 500 remained below the important 3,800 level yesterday; it continues to trade with a weeks-long consolidation.
• In our opinion, the short-term outlook is neutral.

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