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 continue to fluctuate and the S&P 500 index keeps trading close to the early Nov. record high. Will the market break higher?
The S&P 500 index gained 0.34% on Thursday, following Wednesday’s decline of 0.3%. Overnight the market extended its advance and the futures contract reached the new record high. But stock are due to open virtually flat this morning.
The early November rally was not broad-based and it was driven by a handful of tech stocks like MSFT, NVDA, TSLA. The market seemed overbought in the short-term and it traded within a topping pattern. Then the index retraced some of that advance, as it fell the 88 points from the record high of 4,718.50.
The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,720. The S&P 500 broke below its steep short-term upward trend line recently, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):
Futures Contract Reached the New Record High Overnight
Let’s take a look at the hourly chart of the S&P 500 futures contract. The market reached the new record high overnight, but then it quickly got back to the recent trading range. It remains above a month-long upward trend line. 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 0.1% higher this morning. We will likely see some more short-term fluctuations along the 4,700 level. For now, it looks like a short-term consolidation and a flat correction within an uptrend.
Here’s the breakdown:
- The S&P 500 is fluctuating along the 4,700 level. For now, it looks like a short-term consolidation following the October-November rally.
- Still 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, 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
