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).
Stocks bounced on Monday, but there may be more uncertainty ahead of the Thursday’s inflation number release.
The S&P 500 index gained 0.90% on Monday as it retraced most its Friday’s decline of around 0.5%. The market extended a short-term consolidation along the 4,500 level. On Friday the daily low was at 4,474.55 so the index fell 132.5 points or 2.9% from its July 27 high of 4,607.07. There is still a lot of uncertainty concerning monetary policy, some technology/AI stocks’ valuation concerns, but investors’ sentiment remains bullish. The market is now waiting for the important Consumer Price Index release on Thursday.
Stocks will likely open 0.6% lower today following global stock markets’ weakness, strengthening U.S. dollar. The index continues to trade along its two-month-long upward trend line last week as we can see on the daily chart:
Futures Contract Is Closer to 4,500 Again
Let’s take a look at the hourly chart of the S&P 500 futures contract. It got back closer to the 4,500 level this morning. The support level is at 4,500 and the resistance level remains at 4,540-4,550, among others.
Conclusion
The S&P 500 will open lower today. The broad stock market will likely extend a short-term consolidation following the recent declines. It still looks like a correction within an uptrend.
Here’s the breakdown:
- The S&P 500 remains close to the 4,500 level after bouncing down from the recent high of around 4,607.
- In my opinion, the short-term outlook is still 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
