Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27).

Stock prices reached new highs, but there may be more volatility amid Fed, earnings.

The S&P 500 index gained 0.28% on Tuesday as it got back to its previous local high after breaking above the recent trading range. The index reached new medium-term high of 4,580.62 yesterday and it was the highest since April of 2022. Stocks were gaining ahead of quarterly earnings releases, among other factors. There is still a lot of uncertainty concerning monetary policy, some technology/AI stocks’ valuation concerns, but the investors’ sentiment remains bullish. The market is waiting for more quarterly corporate earnings releases and the important FOMC release today at 2:00 p.m.

Stocks are expected to open 0.2% lower this morning, so the S&P 500 will likely retrace more of its yesterday’s intraday advance to new medium-term high. It is still trading way above an almost two-month-long upward trend line as we can see on the daily chart:

Futures Contract Trades Sideways

Let’s take a look at the hourly chart of the S&P 500 futures contract. Recently it rallied above the 4,600 level then it retreated to around 4,560. Yesterday the contract advanced back above 4,600. The nearest important resistance level remains at 4,600-4,620.

Conclusion

The S&P 500 will open slightly lower this morning. The market will be waiting for the FOMC release today and there will likely be an increased volatility at 2:00 p.m. Investors will be also waiting for more quarterly earnings releases. There have been no confirmed negative signals so far and for now, it looks like a relatively flat correction within an uptrend.

Here’s the breakdown:

• The S&P 500 reached new high yesterday, but there may be some more volatility following the Fed release.
• There have been no confirmed negative signals.
• In my opinion, the short-term outlook is bullish and long positions are still 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 still justified from the risk/reward point of view (since Feb. 27).

Thank you.

Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care