SPX potential scenario's | S&P500
Updated
SPXThe S&P500 achieved an all-time high of $4818.62 in January 2022, following which it declined to $4110.42 YTD and reached a low of $3636.87 in June 2022.
Patience is required in this situation, as the S&P's outlook will become clear over the next few months. Hence, the resistance and support levels of $4326 and $3635, respectively, might indicate this.
This strategy and analysis, which will soon be tested in 2022, have already proven beneficial in the dot-com catastrophe of 2001, the financial crisis of 2007, the COVID-19 pandemic of 2020, and the 1990s recession, along with the Wall Street crash in the early 30s.
For the strategy to be beneficial, the price must first achieve an all-time high, then drop below the monthly 21 EMA , then rise once again and touch the 21 EMA , where it will then be tested using the support and resistance levels. All these steps occurred and could be seen in the graph above. The last step will be that the price will move in one of two directions after reaching the 21 EMA: up and through the resistance, or down and through the support.
If it breaks through the resistance, the price will rise higher and hit new all-time highs. However, if it breaks through the support, the stock will plunge even lower and prices will collapse.
The Stoch RSI implies that the S&P will rise, along with the LT AxelX 2.0 indicator, which shows a bottom yellow bar that suggests the index is oversold and may also rise at this time.
Although the LT AxelX 2.0 indicator is not completely reliable, it has often shown itself to be accurate and likely since, in September 2021, it indicated that the S&P was overbought, and a year later, we can see that the price has actually fallen.
Key intakes:
- Be patient and keep a careful eye on the S&P 500's price in the upcoming months, as well as the fed funds rate and inflation , since these factors will help guide you.
- Resistance: If the price of the S&P 500 has broken through the resistance, it may be a sign that the index will continue to rise and hit an all-time high in the years to come.
- Support: whilst if the S&P price has fallen below the support level , then this suggests that it may crash in the coming years (hence, the current market fear of a recession).
- This strategy and analysis projects the market presumptions for the long-term (1-3 years).
There are no certainties in any of these analysis; only hypotheses and possibilities. The strategy indicates a possible rise or decline in price of the SPX Index over time and not a guarantee. Additionally, none of these considerations or presumptions take into account present or projected levels of inflation and interest rates.
Please conduct your own reading and study and additional analysis of the current market and economic situation before copying any strategy.
Note
YTD the SPX index has fallen from an all time high by nearly 24%. And historically, after the SPX drops by approximately 20% it usually bounces and recover by nearly 67%, thus if it occurs, the projected price of the SPX could reach $6105.81 as shown in the graph above by the orange line above the resistance.
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