Stocks to Correct Last Week’s Advance – Is Uptrend Over?
The S&P 500 went close to the 4,100 level on Friday - will the uptrend continue?
The broad stock market index gained 0.25% on Friday after reaching new local high of 4,094.21. The S&P 500 was the highest since December 13, but it sold off at the end of the day. Last week the index extended its bounce from January 19 local low of 3,885.54 and it retraced most of the December’s decline.
The S&P 500 is expected to open 0.9% lower this morning, so it will likely see a downward correction. The markets will be waiting for Wednesday’s Fed release and this week’s important earnings releases. The S&P 500 bounced from the 4,100 resistance level, as we can see on the daily chart:
Futures Contract Trades Along 4,050
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Friday it went slightly above the 4,100 level, and this morning it’s trading along 4,050. The resistance level remains at 4,100, and the support level is now at 4,030-4,050, among others.
Stocks will likely open lower this morning following global markets’ overnight weakness. The S&P 500 index will extend its Friday’s late-session downward correction. For now, it looks like a retracement within a short-term uptrend. The markets will be waiting for the important Fed’s release on Wednesday and more quarterly corporate earnings reports this week.
Here’s the breakdown:
- The S&P 500 index is expected to retrace more of its recent advance this morning.
- Investors will be waiting for earnings, Fed’s rate decision.
- In my opinion, the short-term outlook is neutral.
Stock Trading Strategist