SPX
US500
Hi,
I wanted to share my thoughs on the S&P 500 in the short-medium term trend/correction. It's a bit disappointing the strengh showed by the S&P since the FED iniciated it's agressive ETF campaign (in terms of atracting new buyers into the trend as we see the S&P continuing to make new higher highs but almost like a direct correlation less and less volume since it get closer to the last high right before the crash). I really think a 2nd coronavirus wave could potentially hit the US just like we're seeing in the EU at the moment, unless the US surprises the whole world with new measures in the 2nd wave it would aaffect pretty much the same way it did a couple months ago, BUT with the already damaged economy (in the US and worlwide). So, hypothetically speaking, let's imagine a 2nd wave goes through the US, the government adopts the same measurments just like the 1st wave... What would happen if the remaining optimistic buyers flew away, what would happen if new sellers came in. I pretty much think the FED coulnd't support another drop just buying ETF's. I think if we get to that situation the FED would most likely (sadly for the american contributors) adopt new levels of aggressiveness a.k.a would most likely start to buy stocks directly.
KEY POINTS:
2nd corona wave hits US
FED still has "free pass" (70% sure about that tho)
No new buyers if the SP continues to hit new highs
But, as we know stonks only go up (just a lil joke in this terrible situation we're living :D), how or wich position should we adopt. I marked those levels (green circles) as potential buy zones for the long-long term (+15 years). If we're speaking of an intelligent investor (shoutout B.G) "we should be greedy when others are fearful". What I'm trying to say is, that potential buy zones are marked based in past market behavior on crashes in stock exchanges. I would expect price to strangle around that areas, with the pump of the FED plus the absence of selling interest as it would be such a level of uncertainty (in my opinion never seen before just because of the proximity of the crashes) don't really think there could be a Wall St firm brave enough to short it. As we know (and the stok demonstrated) the market can get irrational longer than you can still be solvent. Just to finish I want to add that my focus on the S&P is buy-only, meaning I only look to make buys along with techical and fundemantal analisis.
KEY POINTS:
FED starts to buy Stocks
Wall St firms follow the FED trace
No seller interest
The mass be fearful and closing long positions
Comment:
Just a little pullback happened and entered long near the highlited area.