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.
The S&P 500 accelerated its downtrend, as the currency market caused a lot of turmoil on Friday. Today we may see an intraday rebound, but is the downtrend over?
The S&P 500 index lost 1.72% on Friday, as it accelerated the downtrend following British Pound crashing vs. the U.S. dollar, among other factors. The broad stock market index reached new medium-term low of 3,647.47 and it was over 470 points below the previous Monday’s local high of 4,119.28.
The S&P 500 index is expected to open 0.5% lower this morning and we will likely see a consolidation or a rebound later in the day. The market may be approaching a temporary bottom, as it is trading closer to its medium-term lows from June.
Futures Contract Fluctuates Along the 3,700 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Friday it broke below the 3,700 level and since then it has been trading within a consolidation. There have been no confirmed positive signals so far. However, there are some clear short-term oversold conditions that may lead to a rebound.
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 open lower this morning, but it may reach a temporary bottom. The sentiment remains bearish following Wednesday’s interest rate hike, but some clear oversold conditions point to bounce or a consolidation in the near term.
Here’s the breakdown:
- Stocks prices are expected to open slightly lower this morning; we may see a rebound later in the day.
- In our opinion, the short-term outlook is neutral.
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
