Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are currently justified from the risk/reward point of view.
Stocks are expected to break below their recent lows – will downtrend continue?
The S&P 500 index lost 0.47% on Wednesday, as it extended its recent declines on interest rate, Russia-Ukraine war fears, among other factors. It went slightly below last week’s Friday’s local low, as yesterday’s daily low was at 3,939.05.
This morning we’ll likely see more downside, as the S&P 500 is expected to open 0.5% lower. So it will further extend the downtrend. In early February the index broke below the upward trend line, as we can see on the daily chart:
Futures Contract Is at New Local Lows
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke below the previous low of around 3,950. The support level is now at around 3,900, and the resistance level is at 3,950, among others.
Conclusion
The S&P 500 index is expected to open lower, which means it will break below the previous low and the support level of around 3,950. There have been no confirmed positive signals so far. However, we may see a rebound at some point and possibly a short-term bottoming pattern.
Here’s the breakdown:
- Stocks will extend their downtrend this morning.
- The S&P 500 index bounced from the 4,000 level and it broke below the recent low; however, we may see another rebound at some point.
- In my opinion, the short-term outlook is bullish and long positions are justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long 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
