Grim U.S. GDP Data May Trigger Reversal In Stocks – Investment Watch

by Paul Rejczak through Sunshine Income

The S&P 500 index barely prolonged its downtrend yesterday, however on the finish of the day it was increased. So was it a reversal or simply one other short-term bounce?

The broad inventory market index gained 0.21% on Wednesday, after bouncing from the brand new native low of 4,162.90. The S&P 500 fell to its March native lows of round 4,160. It prolonged the downtrend regardless of quarterly company earnings releases. There’s nonetheless a number of uncertainty in regards to the Fed’s financial coverage tightening fears and Ukraine battle. This morning the S&P 500 index is predicted to open 1.1% increased following yesterday’s FB quarterly earnings launch. Nonetheless, the market retraced a few of its in a single day advance after a lot worse than anticipated quarterly Advance GDP knowledge launch (-1.4% vs. expectations of +1.1%).

The closest necessary resistance stage is now at round 4,200-4,250. Then again, the assist stage is at 4,100-4,150, marked by the earlier lows. The S&P 500 index retraced the entire March advance, as we are able to see on the each day chart (chart by courtesy of stockcharts.com):

Futures Contract Above 4,200 Once more

Let’s check out the hourly chart of the S&P 500 futures contract. On Tuesday the market fell to its earlier native lows of round 4,140, and yesterday it bounced again above the 4,200 stage once more.

The market is technically oversold and there are some constructive development exhaustion indicators. Subsequently, we expect an upward correction from the present ranges (our premium Inventory Buying and selling Alert consists of particulars of our buying and selling positions together with the stop-loss and revenue goal ranges). (chart by courtesy of tradingview.com):

Conclusion

On Wednesday, the S&P 500 index fluctuated following its current declines. The market closed increased, but it surely was nonetheless under the 4,200 stage. As we speak, the necessary Advance GDP launch was a lot worse than anticipated. Nonetheless, we may even see a “promote the rumor, purchase the information” motion right here. Traders may also anticipate at present’s necessary quarterly earnings releases from AAPL and AMZN.

Right here’s the breakdown:

• The S&P 500 index remained under the 4,200 stage yesterday; it might be counterintuitive, however at present’s worse than anticipated Advance GDP launch might set off an upward reversal.
• We expect an upward correction from the present ranges.

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Thanks.

Paul Rejczak,
Inventory Buying and selling Strategist
Sunshine Income: Efficient Investments by means of Diligence and Care