The S&P finished with slight gains on Monday after a strong day of selling on Friday, this morning’s price action via the S&P 500 futures is near 7,440.00 which is higher than yesterday’s cash close around 7,405.72.
Speculators will have plenty of decisions to make if they are trying to find opportunities short or near-term in the S&P 500. Futures trading at this moment is around 7,440.00 which is higher than yesterday’s close. However, the index remains stiffly below its highs before its large turn downwards which occurred on Friday.
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While some day traders may be tempted into the S&P 500 today because they believe the market oversold on Friday, yesterday’s slight gains were not magnificent and the index remains near lows seen in May. That doesn’t mean the S&P 500 hasn’t created stellar gains for financial institutions and long-term investors, but it should be a warning sign for speculators looking for quick profits which are not guaranteed to occur – timeframes matter.
7,500 Above as a Target for Optimistic Outlooks, But Beware
As yesterday’s news of the brief escalation between Iran and Israel’s military skirmish fades from memory, the S&P 500 will become focused on mid-term outlooks which are showing nervousness regarding equity values and economic figures. There has been plenty of talk of a possible Federal Reserve interest rate hike next week which is causing headwinds. Tomorrow’s CPI numbers regarding inflation are being waited upon too.
However, before traders decide that a bear market has started for the S&P 500 they are reminded that last week’s highs of nearly 7,632.00 had sparked conversations of the 8,000.00 level as a mid-term target. But, yes, for the moment just trying to touch the 7,500.00 ratio may remain a challenge. It appears some investors and analysts are rightfully worried about the upcoming SpaceX IPO and potential knock-on effects if the stock starts cause a downturn in the coming week if it sells off when the fanfare disappears.
Near-Term Dangers Abound for the S&P 500
Although yesterday’s ability by the S&P 500 to create some gains was nice, folks have not forgotten what took place last Friday. This morning’s gains on the index are promising regarding possibly more optimism coming into the marketplace later today when the cash market opens and full volumes are seen from the U.S, but day traders should not count on blind buying surges.
A lack of positive impetus and good chatter missing from Wall Street talking heads for the moment is causing negative sentiment.
Part of the reason is that many indicators actually do show the marketplace is overbought.
Traders who are brave enough to try and short the S&P 500 need to be very careful.
Tomorrow’s inflation data from the U.S will be a big driver of sentiment and until then cautious results are likely to be displayed.
S&P 500 Short-Term Outlook:
Current Resistance: 7,450.00
Current Support: 7,427.00
High Target: 7,489.00
Low Target: 7,390.00
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