Monday’s trading brought uncertainty for the stock market – is it topping again?
The S&P 500 gained 0.79% on Monday after opening solidly higher on positive tariff developments from the weekend. However, the market pulled back from its daily high of around 5,460, and this morning futures indicate it will open 0.2% lower.
Investor sentiment remained bearish, as shown in the last Wednesday’s AAII Investor Sentiment Survey, which reported that 28.5% of individual investors are bullish, while 58.9% of them are bearish.
The S&P 500 remains below key 5,500 resistance, as we can see on the daily chart.
S&P 500 Futures Contract: Moving Sideways
This morning, the S&P 500 futures contract is trading slightly higher, remaining above the 5,400 level. No negative signals are evident; however, the market has clearly lost its momentum.
Key support remains around 5,350-5,400, marked by Friday’s fluctuations. Resistance remains around 5,500.
Last Wednesday, I noted that “The contract may be forming a double-bottom pattern, though it's too early to confirm.” This proved correct.
Conclusion
The stock market continued to show short-term bullish momentum yesterday, fueled by hopes of tariff exemptions. However, it remains uncertain whether we're witnessing the beginning of a new uptrend or simply an upward correction following recent declines. Today, the S&P 500 is set to open 0.2% lower, adding to this uncertainty.
Earnings season kicked into high gear today with Bank of America, Citi, Johnson & Johnson, and PNC reporting before the bell. Boeing stock fell almost 4% in premarket trading after reports that China instructed its airlines to suspend additional Boeing jet deliveries.
The market continues to be highly sensitive to trade policy developments, and volatility is likely to persist.
Here’s the breakdown:
- S&P 500 futures point to a slightly lower open, suggesting potential consolidation after recent gains.
- It is still a news-driven market, with tariff developments in focus.
- The Volatility Breakout System is currently long on the S&P 500 index.
As always, we’ll keep you, our subscribers, well-informed.
The full version of today’s analysis - today’s Stock Trading Alert - is bigger than what you read above, and it includes the current S&P 500 position. I encourage you to subscribe and read the details today (with a single-time 7-day free trial). Stock Trading Alerts are also a part of our Diamond Package that includes Gold Trading Alerts and Oil Trading Alerts.
And if you’re not yet on our free mailing list, I strongly encourage you to join it - you’ll stay up-to-date with our free analyses that will still put you ahead of 99% of investors that don’t have access to this information. Join our free stock newsletter today.
Thank you.
Paul Rejczak,
Stock Trading Strategist