S&P 500 Futures Trading Outlook (1-2 Days): BULLISH
It is still right to stay long given yesterday’s breakout over the downtrend from January coupled with this morning’s follow through. And while on low volume, it should still lead a bit higher.
This is a welcome development for Bulls, as the breakout is a sign that the three-month consolidation from late January could be over.
We’ve seen constructive trend breakouts also on the Dow Jones Industrials and the NASDAQ Composite pushed past its April highs and seems to have a bit more to go before it reaches technical price and time targets.
Lingering concerns revolve around the lack of volume yesterday, while Industrials (XLI) and Financials (XLF) remain in downtrends, both relatively and absolute.. so these have not broken out like the major indices. And while Technology (XLK) has broken out, it’s showing counter-trend signs that its rally vs the S&P 500 can stall out in the next 2-3 days. So the markets have moved a long way in a very short time.. over 5% since last Thursday on the S&P 500.
I am still bullish and expect more gains today, but have an eye on the exits tactically from a short-term perspective given some of the sector problems and am not convinced that this move means that the worries are gone. The time from 5/15-5/18 could be important timewise to Equities.
If the markets can move past May 20th and are still holding above 2750 on the S&P 500, then I’d have a greater amount of confidence of this move extending further. At present, trends are bullish, but I’m looking to trim longs and considering hedges into next week
There’s potential for the move to hit 2735-2740 into today and/or next week before this reverses. Cautiously bullish but watching for signs of reversal / pullback.
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Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
