Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and no positions are currently justified from the risk/reward point of view.
Stocks bounced on Tuesday after the Fed Chair Powell’s speech – is a correction over?
The S&P 500 index gained 1.29% on Tuesday, as it retraced most of the recent declines following volatile trading session caused by the Fed Chair Powell’s speech. On Thursday the index reached new medium-term high of 4,195.44 after the Fed’s Rate Decision, series of economic data and earnings releases. Yesterday the S&P 500 fell to the local low of 4,088.39, before getting back closer to the important 4,200 level. Recently the broad stock market’s gauge was extending its bounce from January 19 local low of 3,885.54.
Stocks will likely open 0.4% lower this morning. So they may see some more short-term uncertainty. Last week the S&P went the highest since late August of 2022 and it got very close to its last year’s August daily gap down resistance level of around 4,200, as we can see on the daily chart:
Futures Contract – Still Above the Trend Line
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading along the upward trend line. Yesterday it bounced from the support level of 4,100 again. On the other hand, the resistance level remains at 4,180-4,200.
Conclusion
The S&P 500 index will open slightly lower this morning. We may see some more short-term uncertainty and a consolidation. For now, it looks like a correction within an uptrend.
Here’s the breakdown:
- The S&P 500 index went closer to its last week’s new medium-term high yesterday.
- Stock prices are fluctuating within a consolidation following recent advances.
- In my opinion, the short-term outlook is neutral and no positions are justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and 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
