According to TradingShot from tradingview, we could be geared for a bullish few weeks and the monthly candle can close green.
Price has made a new Lower Low on the blue Channel above. The bottom of the channel is also aligned with the -0.236 Fibonacci extension. The expectation here is a bounce and price will move up for about 1 month.
Another clue that the authored pointed out is the daily RSI potential double bottom. This pattern mirrors the Lower Lows trade history of late January – February 2022, which resulted in a run up and created a channel down after the eventual sell off.
Our Take – Is the S&P 500 Going Back Up?
We think the S&P 500 will go up likely this or next week. There has been some bullish daily candles 5 trading days which indicates that there are buyers here.
There is no question that the momentum is to the downside. All the moving averages are all pointed down. Any long positions will need to take caution and have a line drawn in the sand of where to exit if the trade goes against you.
What are some long side targets? 3900, 4100, 4400.
According to TradingShot from Tradingview, the Inflation Rate (orange trend-line) is testing a 100 year old trendline. The last time it was there was the around April 1980!
This all started back in July 1920 where the reading was around 24. The next lower high came in around 1947 in May at around 20. Connecting the two points, you get a downward sloping trendline. The next time inflation rate touch the trendline was in April 1980 and now we have touched it again.
How Will Inflation Affect the Stock Market?
If the past is going to repeat itself like the previous 3 times, then we should see a multi-year bear market.
Keep in mind, having inflation rate at these high levels is not the only factor that can cause a bear market, ie the stock market crash of 2000, and 2008 are recent prime examples.
What is important to note, is that after the July 1920 inflation spike, the stock market has had the biggest market crash in history, and that is the 1929 market crash where the market dropped 80% from its all time highs. This market event could happen this time and could even be much bigger.
How Do You Prepare for a Stock Market Crash?
Decrease your market exposure. You can’t lose what is not at risk. Remember the fast crash in of 2020? Imagine if you had gone to cash and bought back near the lows. You would have made significantly increased your net wealth. If this is too risky of a play, you can always stay in cash and just step aside.
Increase cash reserves. If you are low in cash and don’t have an emergency fund of at least 6 months, then it is imperative that one make an effort to build up cash reserves. This allows for piece of mind when unforeseen bad events happen in life, and you have cash to make the bad times pass on an easier level. Be the squirrel that prepares for a harsh and low winter.
Increase ownership of real assets. If you read history on catastrophic economic events from around the world, you’d see that it pays to have actual commodities to trade when times get tough. Precious metals such as silver and gold and common ways to hedge against market crash. If you have real estate that is already paid off then it’s also a huge plus.
Learn to tradeand make money on the crash! Don’t pigeon hole yourself to thinking that you can only make money while the market goes up. Realize your risk tolerance and learn to profit by shorting common stock, buying inverse ETFs, or trading put options. Like any skill, trading will take time to learn, but it’s definitely worth your while because it will protect your net worth especially in before and during a stock market crash. Don’t be a fool and do nothing during a crash like traditional wisdom suggests.
The stock market is just a community of buyers and sellers represented on a chart. Learn to trade this chart and take control of your destiny.
ICMarkets is an online Forex brokerage firm based in Australia and they specialize in providing Forex trading services to its members. Along with Forex trading, they also offer many CFD trading products as well. They are a global online brokerage company, but they do not all countries are currently being serviced by them.
ICMarkets system makes it easy for beginners and casual investors to make trades in Forex and CFDs online. Accounts are easy to set up and are fully accessible wherever there is mobile or Internet access.
5 Things that You Should Know about ICMarketsBefore Becoming a Member
ICMarkets is a global brokerage firm – ICMarkets was founded in 2007 in Australia, but it allows people from all over the globe to set up an account and give them access to multiple Forex and CDF trading markets. However, if you are living in the US you are not able to set up an account on their trading system. Since providing detailed financial information is part of the sign up process, you are required to verify your address.
Offers multiple trading platforms – All members have full access to account data via three powerful trading platforms; web-based, desktop, and mobile apps. ICMarkets trading system uses the powerful Meta Trader 4 trading platform technology for all three of its trading platforms. The Meta Trader 4 is an industry-standard Forex trading platform and ICMarkets offers its account holders the use of all three. The Meta Trader 4 mobile app is available for both Apple iOS users and Google’s Android users as well. For desktop users, Meta Trader 4 is fully downloadable for both Windows and Apple’s OSX operating systems. Meta Trader 4 can also be accessed as a web-based platform as well.
Low start-up minimum and lower fees – When getting started with your trading account you only need to make a small $200 deposit. After establishing your trading account you will not be charged for several things like money deposits or withdrawals. There are no monthly account fees or no inactivity fees. There will be low fees associated with your Forex or CDF trades.
Readily available research – Research is a very important and necessary part of investing and ICMarkets offers all of its members access to plenty of research. Each of the three trading platforms provides ready access to all of the research tools that ICMarkets and the Meta Trader 4 platform have to offer. It also includes a very powerful charting tool that helps make decisions on trades.
Investment Educational Tools – ICMarkets offers several different types of training tools for beginner and casual investors. They have plenty of trading videos and tutorials on how to use the trading platforms and all members have full access to all of them 24/7.
Pros and Cons
Pros of using ICMarkets
Account signup and trading activities are all online only
Multiple trading platforms are available; desktop, mobile, and web-based
Very low minimum deposit and lower account fees
Cons of using ICMarkets
Limits its trading product offerings to Forex and CFDs only
