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 slightly higher on Wednesday following their recent consolidation. Are they breaking higher or just fluctuate after last week’s sell-off?

The S&P 500 index gained 0.36% on Wednesday, after gaining 0.2% on Tuesday, as it slightly extended its short-term advance despite U.S. dollar and commodities’ volatility. Stocks retraced more of their last week’s decline following bouncing from the 3,900-3,950 level. Today the S&P 500 index is expected to open 0.3% and it may get back above the 3,850 level again.

There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy, Russia-Ukraine conflict and the coming quarterly earnings releases season.

Futures Contract is Slightly Higher

Let’s take a look at the hourly chart of the S&P 500 futures contract. It is fluctuating slightly above the 3,850 level this morning, and the resistance level is at around 3,900-3,950, marked by the late June consolidation.

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 0.3% higher and it may see more fluctuations following the recent retreat from local highs of around 3,950. It still looks like a further consolidation after the early June declines from the 4,100-4,200 level.

Here’s the breakdown:

• Stocks are to open slightly higher this morning; we may see some more short-term uncertainty ahead of tomorrow’s monthly jobs data release.
• 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