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 went sideways despite global stock markets’ weakness and strengthening U.S. dollar. Is this an upward reversal or just a consolidation before another leg down?

The broad stock market index gained 0.16% on Tuesday following much lower opening of the trading session. Stocks extended their short-term consolidation after last week’s downward reversal from the 3,900-3,950 level. The S&P 500 index is expected to open 0.1% higher this morning. We may see an attempt at retracing more of the recent declines.

There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy, Russia-Ukraine conflict and the coming quarterly earnings releases season.

Futures Contract Remains Below the 3,850 Level

Let’s take a look at the hourly chart of the S&P 500 futures contract. It continues to fluctuate along the 3,800 level and the short-term resistance level remains at 3,850.

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 will likely open 0.1% higher this morning. It may see more fluctuations following the recent retreat from local highs of around 3,950. It still looks like a further consolidation after the early June declines from the 4,100-4,200 level.

Here’s the breakdown:

• Stocks are expected to open slightly higher this morning; despite negative sentiment, the S&P 500 index may retrace more of the recent declines.
• 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