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 reached new highs, but correction may be coming.
The S&P 500 index gained 0.39% on Monday as it slightly extended its week-long rally. The daily high was at 4,532.85 and the broad stock market’s gauge was the highest since early April of 2022. There is still a lot of uncertainty concerning monetary policy, some technology stocks’ valuation concerns, but the investors’ sentiment remains bullish. The market is waiting for quarterly corporate earnings releases.
The S&P 500 is expected to open 0.1% lower following worse-than-expected Retail Sales number release. The market continues to trade above an over month-long upward trend line as we can see on the daily chart:
Futures Contract Trades Along 4,550
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading within a short-term consolidation. The market retreated from the 4,560 level once again. The nearest important support level remains at around 4,500-4,520.
Conclusion
Stocks will open virtually flat this morning, so the S&P 500 index may extend fluctuations following the recent rally. Investors will be waiting for the coming quarterly corporate earnings releases.
There have been no confirmed negative signals so far. However, the market may see a more pronounced profit taking action at some point.
Here’s the breakdown:
- The S&P 500 remains close to new medium-term high.
- 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
