The S&P 500 remains close to the 4,500 level following last week’s retreat.
The broad stock market index lost 0.37% on Monday, as it continued to fluctuate within a short-term consolidation. The broad stock market’s gauge retraced some of its recent rallies, as it fell to the local low of 4,451.50 on Friday. The market found a short-term bottom after reversing from last Wednesday’s local high of 4,595.31. We will likely see more consolidation along with the 4,500 level.
The nearest important resistance level remains at 4,540, market by the recent local highs. The resistance level is also at 4,600. On the other hand, the support level is at 4,400-4,450. The S&P 500 continues to trade below the November-January consolidation, as we can see on the daily chart:
Nasdaq 100 Remains Relatively Weaker
The technology NASDAQ 100 index followed a similar path last week, as it retraced some of the rally. It remains relatively weaker than the broad stock market. The support level is at 13,800-14,000, and the resistance level is at 15,000-15,200.
Futures Contract – Short-Term Consolidation
Let’s take a look at the hourly chart of the S&P 500 Futures contract. It broke above the short-term downward trend line a week ago before rallying up to around the 4,600 level. It’s trading along the 4,500 level after backing from the Wednesday’s high of 4,586.
The market remains close to the resistance level of its previous local lows, but there have been no confirmed negative signals so far. So in our opinion, no positions are currently justified from the risk/reward point of view.
Conclusion
The S&P 500 index trades within a short-term consolidation following the decline from last week’s Wednesday’s local high. The market will likely extend its consolidation, as investors will be waiting for the Thursday’s Consumer Price Index release. The quarterly earnings season is mostly over now, and there is still an uncertainty concerning Russia-Ukraine tensions.
Here’s the breakdown:
- The S&P 500 index will likely trade within a consolidation ahead of the important Thursday’s consumer inflation number release.
- In our opinion, no positions are currently justified from the risk/reward point of view.