Making a very important choice about the future of the most liquid equity index on earth : I called THE S&P 500 !
At this point the two major options are :
- Scenario A : we slow down the pace, find a resistance nearby on this montly fibonacci target. Bulls expectations cool down, we see the market sentiment slowly declining as we gently retrace back to some weekly supports before one more wave to complete the . Regarding the heavy amount of monetary injection we will probably have to retrace at least 30% of the current cycle to flush out all the excessive liquidities before eventually considering pricing a new (generally 8-10 yrs of run).
- Scenario B : no slow down, and quite the opposite, sellers completely disapear from the landscape and central bankers lose control of the situation ! We obviously will end up in a speculative bubble, seeing investor's leveraging increasing fastly. Of course at some point trees don't grow forever and we'll see a momentum exhaustion. At that point it will be too late to consider a cool down, only solution will be a speculative bubble burst ! But what about the central bank's credit bubble ?? Will it burst in the same time ? Probably yes ! Putting the market in a situation it never faced in its entire existance ! Bursting two bubbles in the same time !
The fact that it would be a first time ever is no reason to consider it impossible ! But hell yeah you can be sure I'll be full short on this if this ever happens !
I'm not meant to predict the future.. And to be honest I have no idea to forecast what the market's decision will be !
Just sharing with you all the major swing moves that I'll look forward to trade within the next years.
Gray lines are the one I'll stay away from (or trade them with low leveraged positions).
Blue / Red will be movements I'll have great confidence in and trade without a doubt !
As a conclusion I'd like to remind you that none of these scenarios plan on a monthly market reversal here ! So big bears better hold their breath.. the nasty part is not for now in any case !
Neither Sinewave or Momentum are giving signs of weakness so all we can get at best is a cool down (retrace to near supports) ! So please don't call me perma-bear !!
Hope this idea will inspire some of you !
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You can check my indicators via my TradingView's Profile : @PRO_Indicators