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2020-06-25 • Updated
The stock market is going through an interesting phase now. On the one hand, some of its areas – specifically, tech stocks - are booming which alerts observes about investors overconfidence. On the other hand, there is a definite dropdown in the overall performance caused by second-wave virus fears amid new outbreaks. Is the march upwards over then?
Definitely not.
The closer the S&P gets to the pre-virus levels, the more downward gravity it will experience.
Hence, the more horizontally-bent it’s trajectory will look like as it moves upwards to ful recovery.
For this reason, it would probably be unwise to expect the recovery keep the upward pace of March and fall into way too optimistic zone 2 – we are already out of that range.
More likely, zone 1 will be where the stock market will be going – it is the most balanced and moderate expectation.
Finally, zone 3 is also a possibility, at least as a bottom to the channel of zone 1 to which the S&P may drop from time to time.
The horizontal-gravity theory is confirmed indirectly by the fact that each sideways/downward retrace lasts longer: as you move from sector A to sector D (we are currently at the bottom of sector D), you have a longer protraction over time.
Therefore, there is no reason to panic. Yes, there are outbreaks but the fundamentals have not changed yet. Take zone 1 as a realistic expectation of where the S&P goes in the nearest midterm and prepare for zone 3 to provide support at 3,000 for a while ahead.
Besides US Retail Sales data, Australian Unemployment Rate and New Zealand GDP this week will bring us Quadruple Witching – one of the four most important days of a year for futures and options!
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On the last summer day, we would like to offer you to watch these significant upcoming moves…
US stock market corrects, gold recovers and the crypto market drops hard! Best trade opportunities during this week in the article! Let’s check the charts and set some goals! NASDAQ (US100) US100 index plunges as the US dollar strengthens…
The US broad-market index, S&P 500, has been pressed below the 50-day moving average for the first time since March! Why?
GBP/USD is moving inside the ascending channel. Since it’s in the lower part of this channel, the pair should reverse up and continue moving in zig-zag.
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