S&P: 40% down?

S&P: 40% down?

2020-06-12 • Updated

We are seeing now a retrace in the S&P – the decadent mood is once again reigning in the stock and Forex market. Investors are fearing the second wave of the virus and all other evils to come. Reasonable enough though – that is all out there among the possibilities, so the earlier the market factors in those disappointments, the better. But let’s make a purely technical analysis of the S&P and see if we can find a pattern.

On the below daily chart the recovery of the S&P after the disaster of February-March may be divided into three waves.

The first one started when the bottom was finally hit at 2,180 and peaked at 2,630 making a 450 points leap. After that, it retraced 180 points down to 2,450 erasing 40% of the gain. That is when the second bottom was being discussed – the people would not believe bulls would be powerful enough to sustain the upside.

The second wave launched at 2,450 and reached 2,960 making a 510-point leap. Then it erased 190 points dropping to 2,770 which is also nearly 40% of this wave. That is when observers were discussing the 50% level and were more confident there would be further rise although those professing the second bottom were still heard.

The third leg launched at 2,770 and peaked recently at 3,230 making another 460-point leap. As it was a complete recovery of the virus damage resulting to be a V-shape, observers got scared that it was too quick, too good, too unbelievable. Eventually, we are now at roughly 3,100. Is that it?

If the “methodology” behind the S&P’s movement stays, we are likely to see a 40% reduction of the leap that was made just like it appeared in the first two waves. In this case, we are likely to bottom out at 3000-3050 and then another wave up will launch. Let’s watch for the signs of a bullish reversal then and check that 40% down.

S&P500Daily 1.png

P.S. If those waves keep the pace, then the coming bullish leg will launch at 3000-3050 and make around 450 points upwards. That should complete in a couple of weeks so the end of June will show how precise our estimation is.

                                                                                                LOG IN

Similar

Many Reasons to Buy Disney Stock
Many Reasons to Buy Disney Stock

People all over the world love kind and colorful Disney cartoons. What if we say that you can both adore the pictures and trade stocks of the company that creates them?

How Alibaba Deals with Troubled Times?
How Alibaba Deals with Troubled Times?

The e-commerce giant has recently faced a lot of pressure, starting from global uncertainty in China amid lockdowns and geopolitics. The company has been added to the US SEC (Securities and Exchange Commission) delisting queue. Finally, there’s an earnings report coming on August 4. Let’s discuss everything and prepare for the next move.

Strong Buy for Citibank is Close
Strong Buy for Citibank is Close

Citigroup (CITIGROUP) will release its earnings report on July 15, before the market opens. Analysts expect an EPS of $1.67 per share and total revenue of $18.04 billion. Should you buy the stock?

Latest news

TRADE IDEA: IS THE FUTURE OF GOLD CLEAR YET?
TRADE IDEA: IS THE FUTURE OF GOLD CLEAR YET?

For those who may be unfamiliar with Price Action trading, the horizontal arrows represent areas where the market structure was broken. As you can see in the scenario above, price broke below the previous low at the two marked instances

TRADE IDEA: Technical Breakdown of Top Cryptos
TRADE IDEA: Technical Breakdown of Top Cryptos

Let's start off with a look at the Daily timeframe on Bitcoin. We currently see price reacting to the rally-base-rally demand zone between the 15,600 - 14,300 price area. Price also seems to have found support off the trendline support as marked in the image above. Interestingly, this means the overall bias on BTCUSD is Bullish.

CBDC: Technology of the Future or Dystopia?
CBDC: Technology of the Future or Dystopia?

Central Bank Digital Currencies (CBDCs) are virtual national money. The idea of ​​creating such currencies came to the authorities after the success of cryptocurrencies, which also exist only in digital form.

Deposit with your local payment systems

Feel the Team Spirit

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera