Uncertainty Ahead Of Quarterly Earnings Season
Paul Rejczak | Apr 13, 2022 09:47AM ET
Stocks fluctuated following their recent decline on Tuesday, and the S&P 500 index closed slightly below the 4,400 level. Is this still just a downward correction?
The S&P 500 index lost 0.34% on Tuesday following its decline Monday of 1.7%. There is still a lot of uncertainty concerning the Ukraine conflict and the Fed’s monetary policy tightening plans. On Monday it led to a more pronounced profit-taking action. However, the coming quarterly earnings releases season may be a positive factor in the near term. This morning the broad stock market is expected to be virtually flat following the Producer Price Index release.
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Futures Contract – Short-Term Consolidation
Let’s take a look at the hourly chart of the S&P 500 futures contract. Recently it broke below the 4,400 level and our profitable long position was closed at the stop-loss (take-profit) level of 4,440. Overall, we gained 100 points on that trade in a little less than two months’ time (it was opened on Feb. 22 at 4,340 level). So now we will wait for another profit opportunity. (chart by courtesy of ):
Conclusion
The S&P 500 index is expected to open 0.1% lower following the producer inflation number release. Stocks will likely extend their consolidation. For now it looks like a relatively flat correction within a short-term downtrend.
Here’s the breakdown:
- The S&P 500 index trades within a short-term consolidation following the recent declines.
- Our profitable long position was closed at the 4,440 level (a gain of 100 points from the Feb. 22 opening).
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