Stock prices advance – Is it just a bounce?
|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.
Want free follow-ups to the above article and details not available to 99%+ investors? Sign up to our free newsletter today!
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.