There’s still no clear direction, as stock prices continue to fluctuate following their mid-June sell-off. So is this a bottoming pattern?

The S&P 500 index lost 0.13% on Wednesday, as it continued to fluctuate below the 3,800 level. Earlier in the week it retraced last week’s Wednesday’s-Friday decline to new medium-term low of 3,636.87. On Friday the market was 1,181.75 points or 24.5% below its Jan. 4 record high of 4,818.62. And on Tuesday it bounced up to around 3,780. Yesterday buyers gave up at 3,800 level though.

There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy and the Russia- Ukraine conflict. Today we will get another Fed Chair Powell’s Testimony at 10:00 a.m. This morning the S&P 500 index will likely open 0.5% higher, following an overnight retreat from the 3,800 level.

The nearest important resistance level is at around 3,800-3,850, marked by the previous support level. The resistance level is also at 3,900. On the other hand, the support level is at 3,650-3,700. The S&P 500 index trades within an over week-long consolidation, as we can see on the daily chart.

SPX

Futures contract remains below the 3,800 level

Let’s take a look at the hourly chart of the S&P 500 futures contract. Last week it broke below the previous consolidation. The market reached new medium-term low on Friday, as it tumbled below the 3,700 level. This morning it is fluctuating slightly below the short-term resistance level of 3,800.

SP500

Conclusion

The S&P 500 index will likely open 0.5% higher this morning and we may see another attempt at breaking above the 3,800 level. For now, it looks like a consolidation within a downtrend or a bottoming pattern.

Here’s the breakdown:

  • The S&P 500 index continues to fluctuate within a consolidation following its mid-June decline.

  • We may see further attempts at breaking above short-term local highs.


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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' employees and associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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