Irrational Exuberance at its best !

OANDA:SPX500USD   S&P 500 Index
SPX has been on a continued uptrend despite witnessing some minor volatilities along the way int last two years. I ain't no expert on calling the top or picking the bottom but given the momentum we are seeing int he US equities, it's better to go with the flow rather than standing between the moving train.

SPX has started the recent bull from February 2016 after it had been in a consolidated range for 2 years. US presidential elections of 2016 simply fuelled the rally that helped the index to give a technical breakout of the trendline that marks from 2008. Post the breakout, the index has literally been on steroid mainly favoured by the central banks' rate cuts.

Volatility crept into the market in 2018 and SPX saw some vicious squeeze and large trading ranges which were good opportunities to make money. Now, since we are on the verge of US-China trade deal that is anticipated to get sorted along with another US election for 2020. Hence, in my view, We could see a trade deal that is set and agreed by both the parties.
A piece of news like this will be enough to pump 250-300 points of a rally in the SPX in 2-3 weeks. Post that, we could also witness an exhaustion rally that would be slow which could be supported by Retail capital (getting trapped) while smart money pulling out before the elections of 2020.

From a technical perspective, I see 3650 as a level (top) for 2020 which coincides with the 61.8% extension of the first bullish wave that has started from February 2016 until October 2018.

Please feel to pitch in your ideas and views, from which even I could get some knowledge or ideas that I have missed.

Have a great Christmas and a fortune filled year ahead !


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