Will stocks continue their uptrend?

Stocks fluctuate ahead of tomorrow’s Fed – is it just a consolidation before another leg up?

The S&P 500 index gained 0.40% on Monday as it retraced some of the recent declines. The broad stock market continues to fluctuate following its last week’s Thursday’s retreat of 0.7%. The market bounced down from Wednesday’s new medium-term high of 4,578.43. Recently stocks were gaining ahead of quarterly earnings releases, among other factors. On Wednesday 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 and the important FOMC release tomorrow.

Stocks will likely open 0.1% higher this morning and the S&P 500 may see more short-term uncertainty. The market broke below its short-term upward trend line but it is still trading way above an over month-long upward trend line as we can see on the daily chart:

Futures contract trades below 4,600

Let’s take a look at the hourly chart of the S&P 500 futures contract. Recently it rallied above the 4,600 level and on Thursday it retreated to around 4,560. The nearest important support level remains at 4,560 and the resistance level is at 4,600-4,620.

Conclusion

The S&P 500 is expected to open virtually flat today. The market will be waiting for the important quarterly earnings releases. Today after the session’s close we will get reports from GOOG and MSFT, among others. Investors will be also waiting for tomorrow’s FOMC Statement release. There have been no confirmed negative signals so far and for now, it looks like a flat correction within an uptrend.

Here’s the breakdown:

The S&P 500 trades sideways following its early July rally.
There have been no confirmed negative signals.
In my opinion, the short-term outlook is still bullish.

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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.