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 medium-term highs yesterday, but a correction may be coming.
The S&P 500 index gained 0.08% on Wednesday after reaching new medium-term high of 4,391.82 as investors reacted to the FOMC Statement release. The broad stock market index was the highest since August of 2022 again.
There is still a lot of uncertainty concerning monetary policy, some technology stocks’ valuation concerns, but overall, the investors’ sentiment is still bullish.
Stocks will likely open 0.4% lower this morning after mixed economic data releases. So the market may see more profit-taking action following the recent rally. The S&P 500 is trading above a month-long upward trend line as we can see on the daily chart:
Futures Contract Trades Along 4,400 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. It went as high as 4,440 yesterday, but the Fed’s release led to a volatility and a pullback to the 4,400 level. The nearest important support level is now at 4,380, and the resistance level is at 4,440.
Conclusion
The S&P 500 index is expected to open lower this morning. It may see a correction following its recent advances. For now, it looks like a relatively flat profit-taking action. There have been no confirmed negative signals so far.
Here’s the breakdown:
- The S&P 500 reached new medium-term high before retracing some of its intraday advance yesterday.
- There have been no confirmed negative signals so far.
- 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
