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).
S&P 500 bounced on Monday, but more sideways trading action may be coming.
The S&P 500 index gained 0.40% on Monday as it retraced some of its Thursday’s-Friday’s sell-off. The market broke lower after the Wednesday’s FOMC monetary policy release. Yesterday the index went the lowest since June but it remained above the 4,300 mark. There’s still a lot of uncertainty about monetary policy and economic growth.
Stocks are expected to open 0.5% lower today, so the S&P 500 index will retrace its Monday’s rebound. It is trading along June and August lows as we can see on the daily chart:
Futures Contract Trades Along 4,350
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading within a consolidation this morning. The support level is still at around 4,350 and the resistance level remains at 4,400.
Conclusion
The S&P 500 is expected to open lower this morning and the market will likely extend a consolidation following the last week’s sell-off.
Investors’ sentiment worsened following the FOMC Press Conference last week. Recently it was improving as the pressure for further monetary policy tightening somewhat was easing. But stocks retraced their late August rally after bouncing off their mid-July local lows resistance level. There have been no confirmed positive signals so far. However, the market may see a bounce at some point.
Here’s the breakdown:
- Stocks went sideways on Monday but there may be more uncertainty and a selling pressure..
- The S&P 500 continues to trade above the 4,300 level.
- In my opinion, the short-term outlook is still 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
