S&P 500 IndexShort
GLOBAL EQUITIES BULL TRAP | FURTHER DOWNSIDE EXPECTED
- Often in downside and upside moves of large magnitude, a phase is present where a large correction occurs.
- This is known as a Bear or Bull trap, respectively.
- It is reasonable to say that we could be in a bull trap right now with stocks up by almost 30%
- An average market cycle high to low has been in the region of 50-60%. This would bring price to strong support and a reasonable area for a rebound (Buy Zone)
- This assumes that this downside cycle will be of the same level or worse than the previous downside cycles.
- The reason for such an expectation is due to the extremity of Covid-19 in terms of unemployment, trade, demand shock and other macro-economic metrics/indicators.
- Also the fact that the pandemic indicates a more longer/severe cycle due to the nature of the event being so complex and impactful.
VERDICT: Signs of a bull trap are becoming increasingly more noticeable and this, along with the extremity of Covid-19, indicates that the crash is expected to continue further.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.