Last Friday’s NFP was disappointing. The reaction of the markets was astonishing. Will it last longer? Let's find out the main trade opportunities for the upcoming week.
Indices are at record highs
2021-05-07 • Updated
Nobody even would be dare to say that such indices like S&P 500, Dow Jones, or Nasdaq will drop in the long term. It’s clear for everybody these well-known indices will rally up no matter what. Even Warren Buffet, one of the most famous investors, has advised his trustees to invest 90% of the money he will leave to his wife in a very low-cost S&P 500 index fund.
This is good advice for newbies and risk-averse investors. However, if you are willing to take a higher amount of risk to increase the potential size of your profit, you should invest the larger part of your capital into stocks. Let’s say 50% into stocks, 50% into indices (in this example we eliminate currency pairs and other assets).
Low risk or huge potential profit?
Anyway, almost every investor has stock indices in his/her portfolio as they have one key advantage. An index, especially the popular one like S&P 500 or NASDAQ, is a low-risk investment as it’s an already diversified asset. If one stock loses its value, the other one will rise and offset the losses. Yes, the growth wouldn’t be too fast as some individual stocks may offer, but you will save yourself from unexpected huge losses. It's a so-called trade-off.
What stock indices to trade in May?
Tech outlook of S&P 500
US 500 (S&P 500) has just broken the psychological level of 4200. Thus, the way up to 4300 is clear now. However, the index wouldn’t grow fast to that price target, it’s likely to have struggled to move above the resistance zone of 4200-4250 as there is the upper line of Bollinger Bands, which the S&P 500 has failed to cross many times. Besides, keep an eye on the RSI indicator. Once it’s above 70.00, it will signal the index is overbought and thus it’s likely to reverse down.
It should be interesting to trade S&P 500 during NFP. If the report is better-than-expected, it may confirm bullish trends and help the stock index to rally up further. On the flip side, the poor NFP figures may worsen the market sentiment and trigger the sell-off of the index.
After multiple hawkish remarks over the past few days from non-voters members, the Federal Reserve chairman Powell surprised the markets with some dovish remarks…
Institutional investors speak about further growth in the stock market. In the exact market that has doubled since COVID-19 and doesn’t plan to stop. Is it possible?
A combo of strong demand and poor supply has sent oil prices to the high unseen since 2018. Gas is at record highs as well.
On Thursday, September 23, shares of Carnival had jumped a solid 3% after the cruise line announced it is on track to have 50% of its fleet sailing again by October, and 65% by the end of the year. So what? Read the article to find out!
It’s unbelievable but China’s government prohibited all transactions with cryptocurrencies.