SPX - sell on rally if fail to close above 3,000
SPX daily price moving into a wedge that could trigger further rally or a sharp selloff in the next 10 trading days.LONG-TERM BEARISH: Market has yet to price in the full effects of Covid and oil price war on the economy. This is unprecedented with low inflation and zero interest rates environment as a result of unlimited money-printing in the last several decades by the Fed. Record low unemployment may now become record high unemployment, the worst we have seen since Great Depression and many businesses will collapse that may have a severe knock-on effect on the financial system.
SHORT-TERM trades: expect volatility this week with corporate earnings. Financial institutions already signaling to investors to expect a bad start to the year and more challenges ahead as more businesses suffer bankruptcy and defaults. I will sell into any rally especially if the index fails to close above 3,000.
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