S&P to 3900, potential on phase1 trade dealAfter an array of failed emergency monetary tactics such as a $500B a year corporate tax break, 3 rounds of Quantitative Easing and 3 rate cuts, finally after the trade deal was announced, we peaked our head well up above the bottom of channel / sub-channel we had been stuck in for over a year now. This was additional evidence that the drag on stock markets despite all the corporate welfare was largely due to the direct impact of the trade war (and related unpredictable policy) on global economies.
Likely it will take a little time to step its way up to top of channel and likely will only happen in the absence of renewed trade tensions. Other than renewed trade tensions, there doesn't seem much in the way to prevent us from seeing the S&P at 3800-3900 in 2020. If we do reach top of this 10 year channel for the S&P bull market, it will be the first time we have seen it in over 4 years now and the actual first evidence of a strong corporate economy under this administration.
At this point the only way to outperform the markets from the previous 8 years is if this administrations economic policies are able to see a break upwards out of top of this 10 year channel without further emergency monetary policy boosting it. After mostly riding the bottom of trend for 4 years now, this is only the second time we have seen hope for breaking out of the sluggish bottom of channel, we just need to maintain the path of restoring global trade and I think we will see top of channel. There is a lot of potential here.
This is not trade advice, DYOR, Author is holding S&P ETF options long.
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