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.

Thursday’s trading session was bullish, as the S&P 500 index broke above the 3,900 level again. But will the short-term uptrend continue today?

The S&P 500 index gained 1.50% on Thursday and its closing price was slightly above the 3,900 level. The broad stock market retraced more of its last week’s declines after bouncing down from the 3,900-3,950 level. This week the market gets higher despite U.S. dollar and commodities’ volatility. Today the S&P 500 index is expected to open 0.5% lower following higher-than-expected Nonfarm Payrolls release. Better jobs data may lead to more a tight monetary policy from the Fed, hence the pre-market decline.

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 Remains Below 3,900

Let’s take a look at the hourly chart of the S&P 500 futures contract. It went above the 3,900 level yesterday and this morning it’s trading along the 3,900 level. The resistance level remains at 3,900-3,950.

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 is expected to open 0.5% lower this morning following monthly jobs data release. We may see a consolidation along the previous week’s local highs. It still looks like a further consolidation after the early June declines from the 4,100-4,200 level.

Here’s the breakdown:

• Stocks will likely open lower this morning; for now, it looks like a correction following the recent advances.
• 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