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 went lower on Wednesday, but a short-term bottom may be in sight.

The S&P 500 index lost 1.38% on Wednesday as it broke below the recent local lows along the 4,565 level. Early in the week it extended a consolidation following last week’s Thursday’s-Friday’s volatility. The S&P 500 is now closer to the 4,500 level as investors await important quarterly earnings releases from AAPL and AMZN today and the monthly jobs data release tomorrow.

Last week on Thursday the market reached new medium-term high of 4,607.07. It was the highest since March of 2022. There is still a lot of uncertainty concerning monetary policy, some technology/AI stocks’ valuation concerns, but the investors’ sentiment remains bullish.

Stocks will likely open 0.2% lower this morning. So the S&P 500 may further extend ithe decline, but most likely it will remain above the 4,500 level. The index went closer to a two-month-long upward trend line yesterday as we can see on the daily chart:

Futures Contract Trades Along 4,520

Let’s take a look at the hourly chart of the S&P 500 futures contract. It has slightly extended its downtrend today. The nearest important support level is at 4,500 and the resistance level remains at 4,550-4,560, marked by the recent local lows.

Conclusion

The S&P 500 index is expected to open slightly lower this morning. Investors will be waiting for the important earnings releases from AAPL and AMZN today after the session’s close and tomorrow’s jobs data release. It looks like a correction within an uptrend, however, if the index breaks below 4,500 it may see more selling pressure.

Here’s the breakdown:

• The S&P 500 went closer to the 4,500 level yesterday; for now it looks like a correction of the uptrend.
• Investors will wait for quarterly earnings releases.
• 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