S&P: before the sun rises

S&P: before the sun rises

2020-07-24 • Updated

A month ago, we wrote an analysis forecasting the possible area of S&P’s movement. So far, it goes exactly as prescribed. The current trajectory lies in the upper layer of the Zone 1 as per that article. That zone was considered as the most probable and moderate movement area from the point of view at the end of June. But the question is, what lies ahead?

Going a bit more fundamental, we have to recognize the following: mostly, the latest bullish advance of the stock market was the result of the optimism of the tech sector. Hence, let’s see the tech sector.

The vanguard

Nvidia is a strong performer. Not a star or giant like Tesla or Amazon (none of which is exclusively a tech company), but a really strong performer. Nvidia already found its way to fall into the pre-crisis trajectory as it is clearly visible at the daily chart below. And currently, a brief look suggests that it just bounced down after tipping above the upper border of the channel. Hence, we are in expectation of a downward correction – probably to the lower border of the channel. With the current dynamic, it will probably come down to the range of 390.

1.png

But that was the spearheading part of the stock market that contributed most fuel to its latest push. Noting that the other part consists of “weaker” stocks that are slower in recovery, let’s look at those.

The rearguard

Mastercard hasn’t reached the pre-virus trajectory yet. It has been in a large sideways channel during the last two months. Currently, it seems to bounce down from the upper border of that channel. In a nutshell, the disposition is very similar to that of Nvidia, but the latter one has an uptrend, while the former is going flat. Hence, some 10% dropdown seems to be coming. After that, probably a bounce upwards.

2.png

Now, knowing that the performance of the S&P is roughly an average between the bullish tech sector and sluggish remaining stocks, here is what we have with the S&P.

The fusion

A trajectory slightly more recovered and bullish than that of Mastercard but way less aggressive than that of Nvidia. The dynamic is the same though: a channel, tipping above it, most probably a slide down, and then – expectedly – bounce upwards.  

3.png

For this reason, yes, it makes sense to expect a dropdown in the stock market and the S&P in the coming days and possibly weeks. But that’s the main thing: it has been foreseen, and it is within a moderate and reasonable projection. In our previous review, we already mentioned than the current sideways period may be protracted horizontally and even last until there are firm victories over the virus in the US. For this reason, just keep patience: it is another night before the sun rises once again.

                                                                                                 LOG IN

Similar

Latest news

NFP Number Will Drive Markets

US stocks are set to open lower Friday, with investors worry over rising tensions between the US and China, deadlock over the next virus relief bill and possible disappointments from the key monthly employment report.

Deposit with your local payment systems

Learn more

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 00:30:00

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