Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and no positions are currently justified from the risk/reward point of view.
Stock prices went sideways on Friday – was it a short-term bottom?
The S&P 500 index gained 0.22% on Friday, as it bounced from the new local low of 4,060.79. On Wednesday and on Thursday the market was declining on stronger U.S. dollar, global markets’ sentiment. The broad stock market retraced some of the recent rally after bouncing down from 4,200 resistance level. On February 2 the S&P 500 reached new medium-term high of 4,195.44 and last Friday it fell to the mentioned new local low. Earlier the broad stock market’s gauge was extending its bounce from the January 19 local low of 3,885.54.
Stocks are expected to open 0.1% higher today. So we’ll see more short-term uncertainty. The market will be waiting for tomorrow’s Consumer Price Index release. The S&P 500 broke below the upward trend line last week, as we can see on the daily chart:
Futures Contract Trades Along 4,100
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading slightly above the 4,100 level this morning. The nearest important resistance level is at around 4,120, market by the recent local low.
Conclusion
The S&P 500 is expected to open slightly higher today. There’s a lot of uncertainty ahead of tomorrow’s CPI release. Most likely the market will be very volatile on that announcement. It still looks like correction within an uptrend.
Here’s the breakdown:
- The S&P 500 index remained below the 4,100 level on Friday.
- Stock prices are expected to open slightly higher, and the market may see more uncertainty ahead of tomorrow’s CPI release.
- In my opinion, the short-term outlook is neutral and no positions are justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and 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
