S&P 500 keeps rallying but correction may be coming
|The S&P 500 reached new medium-term high – will the uptrend continue despite overbought conditions?
The broad stock market index gained 0.71% on Tuesday, as it extended its uptrend ahead of quarterly earnings releases, among other factors. The daily high was at 4,562.36 and the S&P 500 was the highest since early April of 2022. There is still a lot of uncertainty concerning monetary policy, some technology/AI stocks’ valuation concerns, but the investors’ sentiment remains bullish. The market is waiting for more quarterly corporate earnings releases.
Stocks will likely open 0.1% higher this morning. The market continues to trade way above an over month-long upward trend line as we can see on the daily chart:
Futures contract trades closer to 4,600
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading within an intraday consolidation. For now it looks like another flat correction within a short-term uptrend. The nearest important support level is now at 4,560, marked by the recent resistance level.
Conclusion
The S&P 500 extended its short-term advance yesterday and this morning it is likely to open virtually flat. Investors will be waiting for the coming quarterly corporate earnings releases. Today after the session’s close we will get reports from TSLA and NFLX, among others.
There have been no confirmed negative signals so far. However, the market may see a more pronounced profit taking action at some point.
Here’s the breakdown:
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The S&P 500 keeps rallying on economic data, earnings releases.
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There have been no confirmed negative signals.
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In my opinion, the short-term outlook is still bullish.
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