Tuesday’s trading session saw mixed results as stock prices bounced but closed below daily highs. The S&P 500 reached a local high of 5,312.34 before closing more than 70 points lower, with a gain of 1.04%.
Overnight, the Bank of Japan’s calming words were released, and this morning, the S&P 500 is expected to open 1.0% higher in an attempt to retrace its recent sell-off.
Investor sentiment had slightly improved last week, with 44.9% of individual investors feeling bullish and only 25.2% bearish, according to the AAII Investor Sentiment Survey.
The S&P 500 rebounded from the 5,300 level as seen on the daily chart.
Nasdaq 100: Back Above 18,000
Yesterday, the Nasdaq 100 gained 1.02% but retraced most of its rally. This morning, it is expected to open 1.3% higher.
More volatility is expected as the recent sell-off was significant. The market may consolidate, with hopes for a V-shaped rally.
VIX Remains Elevated
The VIX, a measure of market fear, reached its highest level since 2008 on Monday before pulling back. It remains high, indicating ongoing fear in the market.
A dropping VIX historically signifies less fear, while a rising VIX accompanies market downturns.
Futures Contract: Above 2,300 Again
The futures contract traded as low as 5,120 on Monday, rebounded to 5,342, and is now above 5,300. Resistance is at 5,400-5,440.
The market may experience a short-term consolidation or correction before potentially moving lower.
Conclusion
Wednesday’s trading session may open higher, but further consolidation is expected. The short-term outlook is neutral, with the market potentially forming a bottoming pattern or a flat correction.
Key points:
- The S&P 500 accelerated its sell-off but may have found a temporary bottom.
- No clear positive signals are present, leading to a neutral short-term outlook.