DAX vx SP500: Is DAX highly over valued?By comparing the charts of US indexes vs European indexes we usuallly find pretty much the same patterns.
However there is something that really caught my attention, compare the monthly chart of sp500 vs Dax:
DAX is only 6,54% from all time highs of 2022
SP500 is 15,40% from its all time highs of 2022.
NASDAQ is 28,45% from it's all time highs of 2022
This difference is obviously linked to the different policies of central banks, however I wonder if such a huge difference is justified.
German economy has been highly struck by energy prices and German inflation is still 8,5% vs 6,5% in the US.
Sp500index
S&P 500 | Fundamental AnalysisWith the S&P 500 averaging a 14.3 percent annual return over the 10-year period from early 2012 through 2021, investors were in for a nasty surprise when the broad U.S. 500 index ended 2022 down 19.4 percent. To say that pessimism is very high now would probably be an accurate assessment, as things continue to get worse because of expectations of a recession.
So, what's in store for the S&P 500 this year? Will it be able to recover? That's what the smartest investors are wondering today.
While it is impossible to predict how the market will behave in any given year, no matter how hard Wall Street strategists try, we can look to history to get some context. To begin with, two years in a row of negative returns for the S&P 500 is extremely rare.
The last time it happened was during the dot-com crash about 20 years ago. It has happened four times since the Great Depression began in 1929. Who knows? Maybe we are now looking at two consecutive years of declines.
The last time the S&P 500 experienced a decline was in 2008 when the index lost 38% of its value. The following year, it soared by 23%. Obviously, this bodes well for the outlook for 2023.
However, investors should keep in mind the current macroeconomic backdrop. Inflation has been high since mid-2021, forcing the Federal Reserve to aggressively raise interest rates to suppress demand.
Although the December consumer price index rose 6.5% year-over-year, continuing several months of declining growth, there is no doubt that inflation is still a big problem for the economy. Consequently, the central bank will continue to raise interest rates in 2023. Normally, this is not a favorable environment for an equity market correction.
Nevertheless, the mindset of the individual investor should not change. The focus should still be on owning a diversified basket of high-quality companies that you plan to hold for the long term. The only caveat to this investing strategy now is that you may want to exclude companies that are not generating positive net income or have significant debt.
That's because many growth technology stocks, for example, that fit this category perfectly, have had an absolute meltdown in the past year. And this was largely due to their deteriorating financial situation. With rising borrowing costs and heightened macroeconomic uncertainty, it's better to own companies with low or zero debt and positive free cash flow (FCF).
This fresh perspective is because we simply do not know what will happen next in the world or in the economy. Just look at the last three years.
We had a global pandemic that brought the economic engine to a halt. Then we had massive stimulus measures, supply chain disruptions, skyrocketing inflation, and now a tightening of monetary policy. Hardly anyone could have foreseen this sequence of events.
Accepting how unpredictable things really direct attention to looking at financially sound companies as opposed to the more speculative names that may show better growth.
The S&P 500 may or may not recover in 2023. However, this should not be a big problem for long-term investors. What you can control should not change, which is to remain optimistic and look at the long term. Your portfolio will benefit tremendously, and you can keep your peace of mind.
S&P500 - Pt.6 Still looking for more downsideGood morning traders!
We previously explained how in both our two main scenarios we believe S&P500 will complete the bearish wolfe wave in 3600-3650 area.
We are leaning towards the scenario for which we should be in wave 3 of (C) and thus we should be directed towards a lower low.
Our short positions are still in place, average entry @3990.2 and stop loss @4016 for 0.3% risk.
We are also short through a put option that costed us 0.1% of equity.
We will update below!
SPX more downside soonSPX remains bearish.
The downsloping resistance line (yellow line) is still acting as a long-term resistance
The price is breaking down from the Rising Broaderning Wedge which is a bearish pattern.
We expect the price to get rejected from the previous support which now should be acting as a resistance.
More downside coming.
Targets shown in the chart.
Good luck
SPX Is Actually Bullish | My Last Analaysis Was Invalidated When i'm wrong, i'm usually wrong very quickly. My last analysis was invalidated within 24 hours, which is ok because now we know the direction for sure.
Its important to know as to why this breakout is important. A structure, as long as 264 days has been broken.
A broken structure leads to change! Usually a change in trend. That does not mean we're going to shoot back up to the moon (we could), but at the very least the downtrend seems to be over.
the next target is 4100, located at the previous resistance.
SP500- High probability of an up breakS&P started the year bullish putting in a higher low on our daily chart and after reaching the trend line(that is the talking point in all analyses) corrected slightly.
At this moment the price is flirting with 4k figure and a break up seems very probable.
In such an instance 4.2-4.3k zone becomes in focus for the short term.
P.S: For the long term, on the other hand, I'm not convinced that we have found the bottom
S&P500 BULLISH MOMENTUM LIKELY TO PROPEL INDEX ABOVE TRIANGLE!With price rejection on the index observed last Friday, S&P500 bullish momentum is likely to extend into coming week which will cause the index to rally above the upper channel of the expending triangle. Another huddle for the index to overcome is the resistance at 4060 circa. Forecast is for the index to rise above the resistance level to re-test the swing high in "b".
N.B!
- S&P500 price might not follow drawn lines . Actual price movement may likely differ from the forecast.
- Let emotions and sentiments work for you
- ALWAYS Use Proper Risk Management In Your Trades
#s&p500
#spx500
#spx
fateful week for ES1the last swing forced price to retracement to dark gray box, after that smartmoney forced price to reach upper gray box.
so on, price had good retracement and we saw first try to break bearish weekly order block which is failed.
we have got two narriation:
1. price goes up and take 4220 or even bsl.
2. price unable to break weekly ob and goes lower than 3808
i think first narriation will be take the control of price for this week.
Collapse Of The US Economy JAPAN - AMERICA | Part OneJapan's Real Estate and Stock Market Bubble
In the present day, asset bubbles sometimes are fuelled by overly stimulative monetary policy. Japan's economic bubble of the 1980s is a classic example. The yen's 50% surge in the early 1980s triggered a Japanese recession in 1986, and to counter it, the government ushered in a program of monetary and fiscal stimulus.
These measures worked so well that they fostered unbridled speculation, resulting in Japanese stocks and urban land values tripling between 1985 and 1989.
At the peak of the real estate bubble in 1989, the value of the Imperial Palace grounds in Tokyo was greater than that of real estate in the entire state of California.
The bubble burst in 1991, setting the stage for Japan's subsequent years of price deflation and stagnant economic growth known as the Lost Decade
In the midst of an escalating pandemic, the US government enacted fiscal stimulus of an unprecedented magnitude between March 2020 and March 2021. The multifaceted stimulus acts provided for sizable Economic Impact Payments, better known as “stimulus checks”
these payments occurred in the context of significant growth in retail trading accounts and stock prices, particularly the prices of stocks that retail investors
tend to favor. Surveys suggest that on the order of 10%-15% of the payments may have shortly
found their way into the stock market.
The current US Federal reserve balance sheet (WALCL)
8.5 Trillion Dollars as of 2022
900 Billion Dollars from 2008
M2 (M2SL) Supply
21.4 Trillion as of 2022
7.6 Trillion from 2008
S&P 500 Does the S&P500 go up or down?
FOR:
2 times bouncing off the resistance line
Negative sentiment + economic outlook
AGAINST (short-term):
Wedge formation that can develop strong dynamics in both directions
Multiple breakout attempts
200 EMA has not yet been reached, touch is again imminent
Possibility of a reversed head and shoulders formation
Long S&P500S&P500 tapped its major uptrend supports last week and is holding above them. Great time to go long.
It's quite unlikely to go much lower. Targets are around 4500 if/when the first major downtrend breaks (likely given the amount of short positions needing to cover). After that there is one last significant resistance above the last all time high around 4800. If that breaks, the S&P500 is poised for another mid 1990's or mid 1950's bull market that will eventually lead to the type of bear market everyone is predicting now (I wouldn't start looking for a 50% crash until around 2030).
EUR/USD hit major support and is likely headed much higher. This means the dollar index is likely done rising. With the dollar falling, assets are likely to become less correlated and stocks can get back on their uptrend. Good luck out there!
RUT @ the gate of "Havens", if rejected only "Hell" is the ALT !Golden Cross vs. Death Cross: An Overview
Technical analysis involves the use of statistical analysis to make trading decisions. Technical analysts use a ton of data, often in the form of charts, to analyze stocks and markets. At times, the trend lines on these charts curve and cross in ways that form shapes, often given funny names like "cup with handle," "head and shoulders," and "double top." Technical traders learn to recognize these common patterns and what they might portend for the future performance of a stock or market.
A golden cross and a death cross are exact opposites. A golden cross indicates a long-term bull market going forward, while a death cross signals a long-term bear market. Both refer to the solid confirmation of a long-term trend by the occurrence of a short-term moving average crossing over a major long-term moving average.
KEY TAKEAWAYS
A golden cross suggests a long-term bull market going forward, while a death cross suggests a long-term bear market.
Either crossover is considered more significant when accompanied by high trading volume.
Once the crossover occurs, the long-term moving average is considered a major support level (in the case of the golden cross) or resistance level (in the instance of the death cross) for the market from that point forward.
Either cross may occur as a signal of a trend change, but they more frequently occur as a strong confirmation of a change in trend that has already taken place.
S&P500 Is Likely To Go LowerThe SPX made a false breakout. A false breakout means that the price attempted to break out of a pattern, or break support/resistance. The attempt is successful for a short amount of time, before the price goes back to where it was. This usually is a reversal signal.
For now i'm staying bearish, untill the price goes sideways or manages to break the resistance of the channel.
Is it the end of the bear-market rally on the S&P 500?Volatility was high during the Asian and US session yesterday, which saw a reversal of fortunes for the Japanese yen and the US dollar track Wall Street lower by the close on concerns the US is already in a recession.
The yen originally weakened and sent USD/JPY over 250 pips higher as the BOJ did absolutely nothing, catching pre-emptive hawkish bets off guard. Yes with US retail sales sinking to a 12-month low at -1.1% m/m, then industrial production and manufacturing output falling –0.7% m/m and -1.3% respectively, it seems ‘happy new year’ is a distant memory and bears are coming out of hibernation.
The Dow Jones led Wall Street lower (-1.8%) followed by the S&P 500 (-1.56%) and the Nasdaq (-1.3%). It also dragged the dollar lower as traders bet on a lower terminal Fed rate, seeing USD/JPY hand back most of its earlier gains. AUD, CAD and oil were also dragged lower as recession concerns dominated sentiment.
S&P 500 daily chart:
The S&P has stalled at an interesting juncture, and one that may prove to be a major swing high, during its worst session in 21. A large bearish ingulfing candle formed following an intraday false break of 4,000, trend resistance and the 200-day MA. Also note how the S&P has struggled previously at the 50-day MA back in August and twice in December. Volume was also above average to show conviction in the down-day, and the OBV (on balance volume) has been trending lower since November, despite the S&P’s rally since October, to show that bearish volume is dominating overall.
Have we just seen the end of a bear-market rally?
Possibly, perhaps not. But it does appear that a prominent swing high has formed
• Our bias remains bearish below 4016 with an initial target at 3800
• Bears could either enter a break of yesterday’s low, or seek to fade into rallies with yesterday’s bearish candle (this potentially increases the reward to risk ratio)
• If confident this is the end of a bear-market rally, bears could keep an open downside target and manage with a wider stop as it moves lower to managed the inevitable whipsaws along the way
SP500 Critical Symmetrical TriangleIn the daily timeframe, we see that SP500 has been in a downtrend for a long time. In addition, SP500, which has been on the rise again in recent months, has made a symmetrical triangle. If the long-term downtrend is strong, the target will be $3600 on the downside breakout. A possible uptrend will be interpreted as breaking the downtrend and the beginning of a new uptrend in the long run. The target will be $4,170.