As we always say chart patterns can’t be relied upon for that pivotal decision, most especially the short term ones.
The May-July S&P 500 Head and Shoulders pattern (blue curves) which had been used by the bears to call for a market crash appears to have been invalidated.
However, there is another longer term reverse Head and Shoulders (red curves) from which a break off the 950 neckline level would suggest of a vital upward thrust. Technically a break from the 950 should lead towards the 1,234 target. I doubt this to occur unless governments inflate extensively anew (second round stimulus?).
I have no opinion on where the US markets will be headed over the short or medium term. Although given the inflationary tendencies of the US government, it may seem that the recent lows could have likely served as the bottom or the floor, unless proven otherwise. But we're not saying its gonna be a bull market too.
Remember, inflation as a component of US equity returns, [see last week’s Worth Doing: Inflation Analytics Over Traditional Fundamentalism!] are likely to grow at a much faster clip than dividends or real capital returns.
And the US government has been practically inflating to support asset (stock and real estate) prices.
The May-July S&P 500 Head and Shoulders pattern (blue curves) which had been used by the bears to call for a market crash appears to have been invalidated.
However, there is another longer term reverse Head and Shoulders (red curves) from which a break off the 950 neckline level would suggest of a vital upward thrust. Technically a break from the 950 should lead towards the 1,234 target. I doubt this to occur unless governments inflate extensively anew (second round stimulus?).
I have no opinion on where the US markets will be headed over the short or medium term. Although given the inflationary tendencies of the US government, it may seem that the recent lows could have likely served as the bottom or the floor, unless proven otherwise. But we're not saying its gonna be a bull market too.
Remember, inflation as a component of US equity returns, [see last week’s Worth Doing: Inflation Analytics Over Traditional Fundamentalism!] are likely to grow at a much faster clip than dividends or real capital returns.
And the US government has been practically inflating to support asset (stock and real estate) prices.
No comments:
Post a Comment