Hello fellow traders,
I recently posted an idea where I suspect the S&P500 to head lower from here, but does recent economic and "Fed" activity indicate otherwise?
We're all aware that central banks everywhere(except Norway and maybe the BOE) are calling for rate cuts due to slow economic growth. Now in general, when central banks raise rates, stocks suffer a bit and when they lower them stocks tend to do better. However, we've all heared a number of analysts say that "we're late in the economic cycle" and so on and so forth...and what comes before an economic downturn? Economic slowdown.
Now, I'm not bold enough(yet) to stick my head out and call a recession on the cards, but maybe that isn't entirely off of the cards? Why?
The current bull market is 10-years old this year, it cannot go forever. Sure, the S&P might still have some room to go even higher from it's current position but by how much? Back in 2008 central banks also started cutting interest rates to encourage growth(and we all know what happend afterwards) so could this be a repeat? Central banks cutting rates to stimulate growth, instead pushing global markets into recession. Global debt is only at an all-time high and growing bigger by the minute...#bubble
Another indication of a stock market downturn could be the price of Gold reaching a 5-year high. Gold tends to moves in terms of decades. We saw Gold reach an ATH back in 2011 and have gone down ever since. Food for thought...
Anyway, technicals...
The following chart indicates a previous double-top for the S&P500 with price retesting the previous highs. Now, the double-top might become invalid should price move higher from here, or should the resistance hold, price could drop like a rock from here, back down to the bottom of the channel around the highs just before the financial crisis.
So, could this be a long-term short entry??
This is my opinion and not investment/trading advice. Do your own research before risking your hard earned money.
Good luck out there :)
I recently posted an idea where I suspect the S&P500 to head lower from here, but does recent economic and "Fed" activity indicate otherwise?
We're all aware that central banks everywhere(except Norway and maybe the BOE) are calling for rate cuts due to slow economic growth. Now in general, when central banks raise rates, stocks suffer a bit and when they lower them stocks tend to do better. However, we've all heared a number of analysts say that "we're late in the economic cycle" and so on and so forth...and what comes before an economic downturn? Economic slowdown.
Now, I'm not bold enough(yet) to stick my head out and call a recession on the cards, but maybe that isn't entirely off of the cards? Why?
The current bull market is 10-years old this year, it cannot go forever. Sure, the S&P might still have some room to go even higher from it's current position but by how much? Back in 2008 central banks also started cutting interest rates to encourage growth(and we all know what happend afterwards) so could this be a repeat? Central banks cutting rates to stimulate growth, instead pushing global markets into recession. Global debt is only at an all-time high and growing bigger by the minute...#bubble
Another indication of a stock market downturn could be the price of Gold reaching a 5-year high. Gold tends to moves in terms of decades. We saw Gold reach an ATH back in 2011 and have gone down ever since. Food for thought...
Anyway, technicals...
The following chart indicates a previous double-top for the S&P500 with price retesting the previous highs. Now, the double-top might become invalid should price move higher from here, or should the resistance hold, price could drop like a rock from here, back down to the bottom of the channel around the highs just before the financial crisis.
So, could this be a long-term short entry??
This is my opinion and not investment/trading advice. Do your own research before risking your hard earned money.
Good luck out there :)