THE S&P 500, IT IS JUST THE BEGINNING!!!

Hello,

Welcome to this analysis about the S&P 500 and the daily timeframe perspectives. In the recent days and weeks, major developments have been encountered within the financial markets and it is just the beginning of a huge disruption in the financial sector like it has not been seen in a load of time. The corona crisis was just the beginning and the start of what will come in the next times, in such a shacky environment it is necessary to consider that businesses that moved well over the last years will be crucially tested and that it will be a task of selection finding the right opportunities in the market and for businesses to move forward in this environment. Therefore, also in such an uncertain dynamic, there can be good profit chances to move forward with nevertheless it is pivotal to do see the underlying bearish disturbances going on and how to rightly measure the risks and rewards. In this case, now I detected the developments going on and what should be expected in financial markets in the times to come.

Fundamental Aspects:
For almost over 40-years the economy is facing increased inflation accelerated to over 8.50% as the floods of money printed during the corona pandemic caused significant rises in prices together with personal savings that were held during the corona pandemic and the uncertainty it brought and now are moving into the market causing prices to move higher. Taking this into consideration the FED already increased the interest rates and is likely to continue so however, this rate increase development is coming too late as the rates need to be increased in such a manner that they are actually significantly tackling inflation. In this development, many tech stocks such as GOOGL, AMZN, or AAPl together with pivotal stocks from other sectors already declined heavily, the same development holds true for indices within the market. If the rate hikes move on further as declared together with the decreasing FED balance sheet the fundamental dynamic is pointing to a continuation of the bearish development.

Technical Aspects:
As when looking at my chart we can watch there how the S&P 500 is building this massive head-shoulder-formation, in fact the S&P 500 already completed a smaller head-shoulder-formation on its top which already completed and reached out the targets, this increases the likelihood that this bigger head-shoulder-formation also completes in combination with the fundamental factors. The left shoulder and the head have been already completed and as the S&P 500 now also emerged with heavy increased bearish volatility the right shoulder is likely to complete next within the near future. Furthermore the S&P 500 broke below the decisive 400-EMA marked in my chart in red, this EMA has not been broken since the Corona-Crash-Crisis in May 2020 showing the significance of this breakout below the EMA and adding to the bearish scenario. The whole formation will be complete as shown in my chart with the breakout below the neckline, from there on the targets at 3550 will be activated, depending on the situation then it shouldn't be kept from the desk that this will not be the final bottom.

Upcoming Prospects:
Taking all these factors into the consideration the possibility is high that turbulences within the market are not yet stopped, as many major stocks already showed up with heavy declines this can also lead to declines within the other stocks which is displayed in the indices such as the S&P 500. Furthermore, the ongoing tension are just another factor in the FED deciding and staying with the decision to increase the interest rates further in the next times. In such a development it is crucial to look for alternatives or stocks that are undervalued. As historically speaking in situations in which the stock market declines precious metals such as Gold or Silver showed gains and anticyclical movements into the bullish direction this can also be the case now. Cryptocurrencies did not yet faced a major recession or depression besides of the Corona Crisis in which everything crashed, however with Cryptocurrency, it can be similar to precious metals that it is moving anticyclical to stocks. For the next times it will be determining on how the S&P 500 moves into the head-shoulder-target and how the situation has been evolved then.

In this manner, thank you for watching the analysis, all the best!

Comment:

The S&P 500 INDEX broke out below the neckline and completed the whole HS-Formation to continue with the alignements.

The index reached out all the target-zones. Trade closed in profit. ✔

Comment:

ANALYSIS UPDATE: The S&P 500 completed the massive head and shoulder formation to reach out to all the projected target zones.

Trade closed: target reached