We have achieved our short term target level.
Black Swan at 2960.
What are the reasons to sell the indices?
-FED clearly won in stopping the panic, restoring calm & order in the credit markets, and managed to create a new bull market in the equities. However, the new bullish wave in SPX was driven by a few companies’ stocks. The money pumped by FED is not going into the real sector. This is not a sustainable financial operation to support the indices.
-Powell put it clear. We have not seen the worst.
-Risk indicators not aligned with the recession. Every volatility index (except oil volatility) has come down sharply from panic highs. VIX was at 84 now 30 (this is not cheap itself but shows the magnitude of the move lower), VXEEM was at +90 now 32, TYVIX was at 16 now at 5.2, MOVE was at +160 now at 57, Credit protection has come in big, CDX IG from 150 to 86, iTraxx main from +130 to below 80, FRA-OIS spreads have come down big time from panic highs. This feels like an overshoot vs where it should trade in a recession.
-Volumes were not supporting the latest bullish move.
-Sell in May and go away.3 of the 4 coming months historically have a negative return.
-Key technical resistance levels: SMA 200 and Fibonacci 61.8.
-As well explained on Financial Times: US stock market rally confuses liquidity with solvency
Many zombie companies will fail, no matter how much is sprayed around by the Fed
” Two contradictory signals have emanated from the US this week. On the one hand, economic news has been dire: gross domestic product shrank by 4.8 per cent in the first quarter and Jay Powell, Federal Reserve chair, warned of “considerable risks to the economic outlook over the medium term”. Oxford Economics now projects a peak-to-trough decline in GDP of 12 per cent in the first half of this year. That is three times worse than during the 2008 financial crisis.
Technically:
Shorter Term: We focus on the following levels. 2812 2765 2730
Medium Term: After closing below 2700, we predict the index to test 2650 and 2580.
Long term: 2200 2000 1800
We will published detailed May Forecast on Sunday.
Intraday patterns will be updated.
Black Swan at 2960.
What are the reasons to sell the indices?
-FED clearly won in stopping the panic, restoring calm & order in the credit markets, and managed to create a new bull market in the equities. However, the new bullish wave in SPX was driven by a few companies’ stocks. The money pumped by FED is not going into the real sector. This is not a sustainable financial operation to support the indices.
-Powell put it clear. We have not seen the worst.
-Risk indicators not aligned with the recession. Every volatility index (except oil volatility) has come down sharply from panic highs. VIX was at 84 now 30 (this is not cheap itself but shows the magnitude of the move lower), VXEEM was at +90 now 32, TYVIX was at 16 now at 5.2, MOVE was at +160 now at 57, Credit protection has come in big, CDX IG from 150 to 86, iTraxx main from +130 to below 80, FRA-OIS spreads have come down big time from panic highs. This feels like an overshoot vs where it should trade in a recession.
-Volumes were not supporting the latest bullish move.
-Sell in May and go away.3 of the 4 coming months historically have a negative return.
-Key technical resistance levels: SMA 200 and Fibonacci 61.8.
-As well explained on Financial Times: US stock market rally confuses liquidity with solvency
Many zombie companies will fail, no matter how much is sprayed around by the Fed
” Two contradictory signals have emanated from the US this week. On the one hand, economic news has been dire: gross domestic product shrank by 4.8 per cent in the first quarter and Jay Powell, Federal Reserve chair, warned of “considerable risks to the economic outlook over the medium term”. Oxford Economics now projects a peak-to-trough decline in GDP of 12 per cent in the first half of this year. That is three times worse than during the 2008 financial crisis.
Technically:
Shorter Term: We focus on the following levels. 2812 2765 2730
Medium Term: After closing below 2700, we predict the index to test 2650 and 2580.
Long term: 2200 2000 1800
We will published detailed May Forecast on Sunday.
Intraday patterns will be updated.
Discord Channel : discord.gg/Ku9kzfq
Cycle Sniper Indicator: mql5.com/en/market/product/51950
Cycle Sniper Indicator: mql5.com/en/market/product/51950
Penerbitan berkaitan
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Discord Channel : discord.gg/Ku9kzfq
Cycle Sniper Indicator: mql5.com/en/market/product/51950
Cycle Sniper Indicator: mql5.com/en/market/product/51950
Penerbitan berkaitan
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.