Cautious for S&P500 2900!
The wedge pattern is approaching the end and the market needs to select a direction.
Although everything seems "really good", or at least the market thinks it is, we are definitely in one of the most speculative environment in the market history. Every piece of bad news is neglected, and people expect the economic activity to go back to at least 100% the pre-covid level given the current market price.
But how long can this sustain?
Although we have the Fed on our back who sort of assures everybody that it would bailout everything, it is in fact really hard to operate once dept default continues climbing higher. Covid problem is still very hard to deal with given the fact that we still don't have mass testings, contact tracing capabilities, and enough hospital supplies. If the economy opens too soon, which is very likely to happen, we will highly likely see a second wave without the mentioned conditions all met with. And finally, nobody seems to care about the economic numbers and indicators which are as bad as apocalyptic.
All that said, I am leaning to the short said, but I will not gamble on a left side pattern. I think a wise choice would be to wait until the market break down through that 2800 level at the end of the wedge from a pure technical perspective. However, the 2700 level is now a strong support for this policy-driven oversold bounce.
For bulls or those who didn't catch this wave after the back test at 2450 in early April, a successful break above the 2900 level with volume, continuing sentiment euphoria, good news, and no profit taking could possibly lead to another wave up to the 3000-3100 level. But I highly suspect that will happen, but nobody predicts the market, we can only react.
This is just an opinion of mine. Please put your own bet. GL.
Although everything seems "really good", or at least the market thinks it is, we are definitely in one of the most speculative environment in the market history. Every piece of bad news is neglected, and people expect the economic activity to go back to at least 100% the pre-covid level given the current market price.
But how long can this sustain?
Although we have the Fed on our back who sort of assures everybody that it would bailout everything, it is in fact really hard to operate once dept default continues climbing higher. Covid problem is still very hard to deal with given the fact that we still don't have mass testings, contact tracing capabilities, and enough hospital supplies. If the economy opens too soon, which is very likely to happen, we will highly likely see a second wave without the mentioned conditions all met with. And finally, nobody seems to care about the economic numbers and indicators which are as bad as apocalyptic.
All that said, I am leaning to the short said, but I will not gamble on a left side pattern. I think a wise choice would be to wait until the market break down through that 2800 level at the end of the wedge from a pure technical perspective. However, the 2700 level is now a strong support for this policy-driven oversold bounce.
For bulls or those who didn't catch this wave after the back test at 2450 in early April, a successful break above the 2900 level with volume, continuing sentiment euphoria, good news, and no profit taking could possibly lead to another wave up to the 3000-3100 level. But I highly suspect that will happen, but nobody predicts the market, we can only react.
This is just an opinion of mine. Please put your own bet. GL.
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