Post by
drbob512 on Aug 09, 2020 3:27pm
T.A. for S&P 500 :
I have only posted T.A. a couple times in the past few wks cuz nothing has changed the uptrend signals & it has been primarily a stockpicker's mkt with some growth stocks making huge ST & IT moves up while value stocks have lagged. So what now as the S&P 500 is within 3% of ATH 3,393 & Nsdq is making a series of new ATHs? Scenarios that are likely: 1) Index tests ATH & fails to break it so it falls sbarply and a serious downtrend ensues, either 10-20% correction or a bear mkt; 2) after initial failure to take out ATH, index backs off & not long after, it takes it out on 1st or 2nd retest, on way to 3,500 or 3,600 within 1-3 months; 3) index blows through ATH on initial attempt to reach at least 3,500. There are other possible scenarios but i see these 3 as most likely, especially #2. The disconnect betw the economy & stock mkt is primarily due to the QE by FRB supporting liquidity & corp. bonds & to a lesser degree by the Stimulus Packages. Until the Feds stop adding so much liquidity, the mkt won't start a serious downtrend. They will slow down QE when the economy is much stronger, imo.. Remember when the index fell just barely below the prior low but had no follow thru and immediately reversed back up? And when 3,000 was about to be breached but wasnt? Those were examples of QE, $4 trillion in money mkts itching to buy on dips & the huge increase in hedge funds the past 6 months. The longer the economy takes to recover, the longer this bull can run; it is not impossible for it to run to 3,600, 3,800 or even 4,000, as long as QE continues..and Growth stocks will continue to be the leaders, espec disruptive ones, imo. Dyodd always..