S&P 500 bounced to 4,400 – is the downtrend over?
The S&P 500 index gained 0.69% on Monday as it bounced from the Friday’s local low of 4,335.31. On Friday it was 271.76 points or 5.90% below the July 27 medium-term high of 4,607.07. Recently the market was selling off on strengthening U.S. dollar, among other factors.
Stocks are expected to open 0.5% higher, so the S&P 500 index will likely extend its yesterday’s rebound and it will get back above the 4,400 level. However, it is still trading below a month-long downward trend line as we can see on the daily chart:
Futures Contract Is Closer to 4,450
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it continues higher. The nearest important support level is now at around 4,400-4,420 and the resistance level is at 4.450-4,460, among others.
Conclusion
The S&P 500 will extend a rebound this morning. For now, it looks like an upward correction following the recent declines. However, on a longer time frame, the recent declines may have been just a downward correction within a medium-term uptrend.
Investors will be waiting for tomorrow’s PMI releases and the important Fed Chair Powell’s speech at the Jackson Hole Symposium on Friday.
Here’s the breakdown:
- Stock prices are gaining from their last week’s new lows.
- The S&P 500 is expected to get back above the 4,400 level today.
- In my opinion, the short-term outlook is still bullish.
Thank you.
Paul Rejczak,
Stock Trading Strategist