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Stocks Gain on Positive Economic Data – Is This an Uptrend?

By Paul RejczakStock MarketsJan 06, 2023 12:17PM ET
www.investing.com/analysis/stocks-gain-on-positive-economic-data--is-this-an-uptrend-200634098
Stocks Gain on Positive Economic Data – Is This an Uptrend?
By Paul Rejczak   |  Jan 06, 2023 12:17PM ET
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Stocks went closer to their recent local lows yesterday – is this still a potential bottoming pattern?

The S&P 500 index lost 1.16% on Thursday, as it got closer to the 3,800 level again. The broad stock market’s gauge continues to trade within an over two-week-long consolidation following mid-December sell-off from the 4,100 level.

On previous week’s Thursday it reached new medium-term low of 3,764.49, before bouncing back above 3,800. Overall it kept extending a consolidation recently. In mid-December the S&P 500 has been negatively reacting to the December 14 FOMC interest rate hike, among other factors.

The S&P 500 trading higher today following better-than-expected Nonfarm Payrolls release (+223,000 vs. the expected +200,000). Also, the Unemployment Rate fell to 3.5% and the Average Hourly Earnings gained just 0.3% m/m.

The S&P 500 index trades within a consolidation along the 3,800 level, as we can see on the daily chart:

S&P 500 Daily Chart
S&P 500 Daily Chart

Futures Contract Remains Above 3,800

Let’s take a look at the hourly chart of the S&P 500 E-Mini futures contract. It went higher following the important monthly jobs data release. The resistance level is at around 3,900-3,920, and the support level remains at 3,800.

S&P 500 E-Mini Futures
S&P 500 E-Mini Futures

Conclusion

Stocks may see more sideways trading action in the next sessions. Investors will be waiting for the next week’s Fed Chief Powell’s speech on Tuesday, the Consumer Price Index release on Thursday and a coming quarterly corporate earnings season. There have been no confirmed positive signals so far. However, stocks may be forming a bottom here.

Here’s the breakdown:

  • The S&P 500 index is expected to open higher this morning on monthly jobs data.
  • There have been no confirmed positive signals so far, however, stocks may be forming a bottom.
  • In my opinion, the short-term outlook is bullish.

* * * * *

The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his 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. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members 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.

Stocks Gain on Positive Economic Data – Is This an Uptrend?
 

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Stocks Gain on Positive Economic Data – Is This an Uptrend?

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Gabor Istvan Nagy
Gabor Istvan Nagy Jan 06, 2023 1:52PM ET
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