Stocks Extend Losses: S&P 500 Headed Back to 4,400?
Sunshine Profits | Sep 07, 2023 09:21AM ET
- Stock prices may extend their two-month-long consolidation
- The S&P 500 will likely get closer to the 4,400 level again
- In my opinion, the short-term outlook is still bullish
The S&P 500 Index lost 0.70% on Wednesday as it extended its Tuesday’s decline of 0.4%. The market reacted to strengthening the US dollar, among other factors. Recently stock prices were rallying on worse-than-expected economic data and reduced pressure for further monetary policy tightening. And on previous Friday, the index bounced from the local low of around 4,356 despite a hawkish speech from the Fed Chair Powell.
Stocks will likely open 0.7% lower this morning, so the S&P 500 may get closer to the 4,400 level again. The index retraced more of its recent rebound as we can see on the daily chart:
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it is extending a short-term downtrend. The resistance level is now at around 4,480-4,500. On the other hand, the support level is now at 4,400.
The S&P 500 is expected to open lower this morning, so the broad stock market will continue its short-term declines. Last week the investors’ sentiment improved as the pressure for further monetary policy tightening somewhat eased. But stocks may extend a medium-term consolidation after bouncing off their mid-July local low resistance level.
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