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 rallied on Friday, as the they retraced more of the recent declines. Will the short-term uptrend continue?
The S&P 500 index gained 3.06% on Friday, as it closed above the 3,900 level and went the highest since June 10. The broad stock market retraced more of its recent declines after bouncing from the June 17 medium-term low of 3,636.87. On the previous Friday it was 1,181.75 points or 24.5% below its Jan. 4 record high of 4,818.62.
On Friday the index accelerated its advance after breaking above the 3,800 level. This morning the index is expected to open 0.2% higher and we may see a short-term profit-taking action at some point. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy, Russia-Ukraine conflict and the coming quarterly earnings releases season.
Futures Contract Remains Above the 3,900 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above a short-term downward trend line on Friday and it went to the 3,900 level. The market may retrace some of the advance and it may see a short-term downward correction. However, there have been no confirmed negative signals so far.
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 will likely open 0.2% higher this morning, and we may see a profit-taking action following Friday’s rally at some point. The market may keep advancing towards the 4,000 level.
Here’s the breakdown:
- The S&P 500 index is expected to open slightly higher this morning; we may see a short-term profit-taking action.
- In our opinion, no positions are currently 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
