The S&P 500 index fluctuated on Tuesday – is short-term top forming? Or is it just a pause within an uptrend?
The broad stock market index gained 0.87% on Tuesday following its Monday’s decline of 0.9%, as it went sideways along the 4,000 level. The S&P 500 reached new medium-term high of 4,028.84 yesterday and it was the highest since September 13.
This morning stocks will likely open virtually flat after generally better-than-expected economic data releases. There’s still an uncertainty about the Fed’s monetary policy tightening, Russia-Ukraine conflict, among other factors.
The S&P 500 index continues to trade within a short-term consolidation following its last week’s rally, as we can see on the daily chart (chart by courtesy of http://stockcharts.com ):
Futures Contract Trades Along the 4,000 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is extending a short-term consolidation along the 4,000 level. The resistance level is at 4,050, and the support level remains at around 3,950-3,960. (chart by courtesy of http://tradingview.com ):
Conclusion
The S&P 500 index will likely extend its short-term consolidation at the opening of today’s trading session. There has been going a profit-taking action following last week’s rally. We may see some more of that today, as the market seems a little overbought in the short-term. However, there have been no confirmed negative signals so far.
Here’s the breakdown:
- The S&P 500 will likely extend its short-term consolidation today.
- We may see some more profit-taking action.
Thank you.
Paul Rejczak,
Stock Trading Strategist