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.
Stock prices went higher once again on Friday on economic data, earnings releases. Will the uptrend continue despite some clear short-term overbought conditions?
The S&P 500 index gained 1.42% on Friday, after gaining 1.2% on Thursday, as it further extended an over month-long uptrend from the medium-term low of 3,636.87 (June 17), despite the ongoing worries about inflation, tightening Fed’s monetary policy, and Russia-Ukraine conflict. This morning the S&P 500 is expected to open 0.6% higher, so we will likely see a downward correction.
Futures Contract – Short-Term Topping Pattern or Just Consolidation?
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Friday it broke above the resistance level of 4,080, and this morning it’s trading within a consolidation along the 4,100 level.
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 likely open 0.6% lower this morning and it may see a downward correction following last week’s rally today. For now, it looks like a short-term downward correction. There have been no confirmed negative signals so far.
Here’s the breakdown:
- The S&P 500 is expected to open lower this morning; for now, it looks like a downward correction.
- In our opinion, no positions are currently justified from the risk/reward point of view.
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