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S&P 500 bounced from new low yesterday, but was it a bottom?
The S&P 500 index gained 0.02% on Wednesday, as it went sideways following an intraday rebound from new medium-term low of 4,238.63. The market continued its sell-off after last Wednesday’s FOMC monetary policy release. Yesterday the index went the lowest since early June. There’s still a lot of uncertainty about monetary policy and economic growth.
Stocks are expected to open 0.2% lower this morning, so the S&P 500 will fluctuate following its recent sell-off. It retraced more of May-July rally yesterday as we can see on the daily chart:
Futures Contract Is Above 4,300
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s fluctuating after yesterday’s intraday rebound.. The support level is at 4,280-4,300 and the resistance level is at 4,340-4,350.
Conclusion
The S&P 500 extended its sell-off once again yesterday and today it will likely open slightly lower. For now it looks like a consolidation within a downtrend.
Investors’ sentiment worsened following the FOMC Press Conference last week. Recently it was improving as the pressure for further monetary policy tightening somewhat was easing. But stocks retraced their late August rally after bouncing off their mid-July local lows resistance level. There have been no confirmed positive signals so far. However, the market may see a bounce at some point.
Here’s the breakdown:
- Stocks extended their downtrend yesterday as investors’ sentiment remained bearish after last week’s Fed.
- The S&P 500 broke below the 4,300, but it may fluctuate or rebound at some point.
- In my opinion, the short-term outlook is still bullish.
Related: S&P 500: Is It New Downtrend or Still Just a Correction?