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).
The S&P 500 extends its consolidation – is this just a pause before another leg down?
The broad stock market index lost 0.42% on Tuesday after bouncing from new local low of 4,464.39. It went back higher and closed at around 4,500 yesterday. The S&P 500 extended a short-term consolidation following the recent sell-off from July 27 new medium-term high of 4,607.07.
There is still a lot of uncertainty concerning monetary policy, some technology/AI stocks’ valuation concerns, but investors’ sentiment remains bullish. The market is now waiting for the important Consumer Price Index release tomorrow.
The S&P 500 will likely open 0.2% higher today. It continues to trade along a two-month-long upward trend line last week as we can see on the daily chart:
Futures Contract Remains Above 4,500
Let’s take a look at the hourly chart of the S&P 500 futures contract. Yesterday it bounced from the 4,500 level. The support level remains at 4,500 and the resistance level is still at 4,540-4,550, among others.
Conclusion
The S&P 500 is expected to continue its consolidation along the 4,500 level. It still looks like a correction within an uptrend. Investors are waiting for tomorrow’s consumer inflation data release which will likely lead to some volatility.
Here’s the breakdown:
- The S&P 500 remains close to the 4,500 level after bouncing off from the recent high of around 4,607.
- 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
