🤷♂Are retail investors getting caught in a major bear-trap?🔥
The S&P500 has been in its longest bull market in history, did that come to an end in March 2020?
Is this a dead-cat bounce or is the bottom in and we should starting putting on our S&P500 40k hats?
One sign of this being a dead-cat bounce is that since 2018, the RSI (an indicator of the momentum) has been declining while prices have been rising. In 2019 and 2020 the RSI went below 50 for the first time in 8 years, while prices made new all-time highs.
This does not mean it’s a dead-cat bounce, but shows signs that the bull market was already losing steam before 2020.
There has been a slew of articles stating retail investors using apps like RobinHood is on the increase. With very little sports betting going on, many are turning their hands at trading to "buy the dip".
During every bubble the ones that get burnt are retail investors who are the last ones to the party, the stock market just went on its biggest bull run ever, retail investors missed out and thanks to the lock-down have all come running in at once to hold the bags.
RSI doesn’t show a lot of monument for such a strong price movement since March, this could be due to retail investors who usually buy in smaller amounts.
What does the S&P500 need to push to new highs? The markets need good news, the best form of good news is from earning reports, companies keeping dividends etc. But we have not got that, instead we got higher job losses, dividend cuts, bailouts, bankruptcies. These are all signs of a fragile economy.
The market is moving up on news of fresh government stimulus, but will this enough to get the market to reach all-time highs? If you keep printing money will that make the economy better?
We are about to find out.
If we do not breakout to the upside, we can expect to re-test the lows around 24,500 and if that does not hold, the 19,000 range.
Is this a dead-cat bounce or is the bottom in and we should starting putting on our S&P500 40k hats?
One sign of this being a dead-cat bounce is that since 2018, the RSI (an indicator of the momentum) has been declining while prices have been rising. In 2019 and 2020 the RSI went below 50 for the first time in 8 years, while prices made new all-time highs.
This does not mean it’s a dead-cat bounce, but shows signs that the bull market was already losing steam before 2020.
There has been a slew of articles stating retail investors using apps like RobinHood is on the increase. With very little sports betting going on, many are turning their hands at trading to "buy the dip".
During every bubble the ones that get burnt are retail investors who are the last ones to the party, the stock market just went on its biggest bull run ever, retail investors missed out and thanks to the lock-down have all come running in at once to hold the bags.
RSI doesn’t show a lot of monument for such a strong price movement since March, this could be due to retail investors who usually buy in smaller amounts.
What does the S&P500 need to push to new highs? The markets need good news, the best form of good news is from earning reports, companies keeping dividends etc. But we have not got that, instead we got higher job losses, dividend cuts, bailouts, bankruptcies. These are all signs of a fragile economy.
The market is moving up on news of fresh government stimulus, but will this enough to get the market to reach all-time highs? If you keep printing money will that make the economy better?
We are about to find out.
If we do not breakout to the upside, we can expect to re-test the lows around 24,500 and if that does not hold, the 19,000 range.