SPX500 - Points You Must Know

You may already be aware what I am going to tell. But I suggest learn these points again!

Stock Market is in a Downtrend

US Stock Market is in a strong downtrend. This downtrend began in January-2022 when soaring inflation straddled the market. There is high volatility as evident by wide swings between down-trending channel. These wide swings show uncertainty, chaos and confusion - you'd know it more when you compare it with smooth long-term uptrend which followed post-Covid situation.

Stock Market is also Following a Long-term Up-trending Channel

Kick-Start since 2009 when financial crisis faded, US stock market has been lead and guided by a long-term up-trending channel. This channel has often provided support as well as resistance to the market except when Covid-19 occurred which caused a down-spike for a brief period. It is highly probable that the same channel will continue to guide the market.

There is a Point of Confluence

Past Long-term up-trending channel & current down-trending channel have a point of confluence shown by light red circle. At this point of confluence, SPX500 has a already taken support once. If the market comes down, it is possible that it again takes support somewhere near to the point of confluence.

PRECAUTIONS TO TAKE

1. Avoid high-debt stock unless a company shows drastically increasing profit-margin
2. Avoid a stock below 200 MA unless it takes a reversal
3. Keep cash in hand to add when dust is settled
4. Better to spend this time in learning rather than in trading