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 bounced on Wednesday despite U.S. dollar strength, inflation uncertainty. Was it an upward reversal or just another rebound?
The S&P 500 index gained 1.83% on Wednesday, as it retraced its recent declines. The market bounced from the 3,900 level, but it remained within a short-term consolidation following the late August sell-off.
In the first half of August the S&P 500 was 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. On August 16 it reached the local high of 4,325.28.
Today the S&P 500 index will likely open 0.2% lower and we may see an uncertainty following yesterday’s advance. Investors will be waiting for the Fed Chair Powell’s speech at 9:10 a.m.
Futures Contract Got Closer to the 4,000 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. It continues to trade within a short-term consolidation. The nearest important resistance level is at 4,000. The market may be trading within a bottoming pattern.
In our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):
Conclusion
Stocks prices will likely slightly retrace their yesterday’s rally at the open of today’s trading session. We may see some short-term uncertainty, as the S&P 500 got closer to the resistance level of 4,000.
Here’s the breakdown:
- The S&P 500 bounced from the 3,900 level again; it may be trading within a bottoming pattern.
- 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
