Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are currently justified from the risk/reward point of view (since Feb. 27 before session’s open).
The S&P 500 sold off on Thursday, but will it continue lower today?
The S&P 500 index lost 1.85% on Thursday, as it extended a short-term downtrend on news about the troubled Silicon Valley Bank (SIVB). The daily low was at 3,908.70, so the index broke below its March 2 local low of around 3,928.
In late February the index was selling off on interest rate, Russia-Ukraine war fears, among other factors, and last week on Thursday it bounced from the mentioned local low. This week it came back below the 4,000 level following Jerome Powell’s hawkish testimony.
Today the S&P 500 index is expected to open 0.3% higher, so it will bounce and retrace some of the decline. The market is now the lowest since January 20 as we can see on the daily chart:
Futures Contract – Short-Term Rebound In Play
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s bouncing after a mixed monthly jobs data release. The support level is at around 3,930, and the resistance level is at 3,980-4,000, among others.
Conclusion
Stocks are expected to open slightly higher this morning. They will likely retrace some of their yesterday’s sell-off. There have been no confirmed positive signals so far. However, the market may be forming a short-term bottom here. It is still relatively close to the early March local low.
Here’s the breakdown:
- The S&P 500 sold off as banking sector stocks reacted to SIVB news.
- Today the market will likely rebound following a mixed jobs data release.
- In my opinion, the short-term outlook is bullish and long positions are 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 currently justified from the risk/reward point of view (since Feb. 27 before session’s open).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
