Mild correct in US stocks, Pre-Election pump then Market Crash!
It's never easy to predict anything in the market. All we can do is look at the current events, information and make educated guesses and anticipate the move higher or lower. That is exactly what is done here!
We are in a "pullback" area where the market is in a correction move right now where the S&P 500 (the economic index) is down about 7% from its all-time high, considering the most recent all-time broke the prior all-time high by 5.5% we have given back a normal amount of low volume gains. These gains were partially accumulated by Soft Bank and retail investors. This is a healthy correction in these market conditions where you have severely overvalued tech that leads the rally.
We have outlined a lot of things in this image. Where the prior all-time high was that did not hold much of a support zone. From there we could pull back into the next structure high which is a 8.7% pullback and comes into a huge volume profile level that should hold at least temporarily at 3275.
The next level below should the price continue to slip is 1. the prior peak higher before we started this huge rally and saw a 9% drop off the level and 2. The volume profile edge or value area high. this is a pivotal area around 3220 and the 10% drop from all-time highs.
From there we don't have to stall out and continue to push back up again, we could drop through that level by a few more percent. However, we do anticipate a red September on the back of fund rebalancing. From there we do expect a rally into the Federal Election. This would be on the back of Fed stimulus coming through and helping revive the economy to their best efforts. This would also help Trump look really good ahead of the election if the economy prints a positive GDP quarter and the market is at all-time highs.
However, beware of advancing Biden in the polls which could put a damper on the upside of the market. We do anticipate a nice pre-election rally to push into all-time highs. Maybe not 3,700 but a target is 3,630-3,650 to the upside. From there we expect a very interesting phenomenon to occur.
The post-election crash, typically seen throughout a "crisis" year where we have an economic downturn, as we've seen over the decade. After an election, the market gives up a huge portion of the gains, regardless of the winner. In this case, if Trump is to be re-elected the downside may be more muted compared to Biden's win.
Should the market drop to 2870 right now we would enter a bear market, if we get up to 3,750 pre-election a drop to 2870 is a 23% drop, some say that we may erase 4-year worth of ES gains post-election which is a bit on the aggressive and dark side.
Retrospectively, we do have an optimistic sentiment throughout the majority of the end of the year but could see a gloomy end to it all.
We are in a "pullback" area where the market is in a correction move right now where the S&P 500 (the economic index) is down about 7% from its all-time high, considering the most recent all-time broke the prior all-time high by 5.5% we have given back a normal amount of low volume gains. These gains were partially accumulated by Soft Bank and retail investors. This is a healthy correction in these market conditions where you have severely overvalued tech that leads the rally.
We have outlined a lot of things in this image. Where the prior all-time high was that did not hold much of a support zone. From there we could pull back into the next structure high which is a 8.7% pullback and comes into a huge volume profile level that should hold at least temporarily at 3275.
The next level below should the price continue to slip is 1. the prior peak higher before we started this huge rally and saw a 9% drop off the level and 2. The volume profile edge or value area high. this is a pivotal area around 3220 and the 10% drop from all-time highs.
From there we don't have to stall out and continue to push back up again, we could drop through that level by a few more percent. However, we do anticipate a red September on the back of fund rebalancing. From there we do expect a rally into the Federal Election. This would be on the back of Fed stimulus coming through and helping revive the economy to their best efforts. This would also help Trump look really good ahead of the election if the economy prints a positive GDP quarter and the market is at all-time highs.
However, beware of advancing Biden in the polls which could put a damper on the upside of the market. We do anticipate a nice pre-election rally to push into all-time highs. Maybe not 3,700 but a target is 3,630-3,650 to the upside. From there we expect a very interesting phenomenon to occur.
The post-election crash, typically seen throughout a "crisis" year where we have an economic downturn, as we've seen over the decade. After an election, the market gives up a huge portion of the gains, regardless of the winner. In this case, if Trump is to be re-elected the downside may be more muted compared to Biden's win.
Should the market drop to 2870 right now we would enter a bear market, if we get up to 3,750 pre-election a drop to 2870 is a 23% drop, some say that we may erase 4-year worth of ES gains post-election which is a bit on the aggressive and dark side.
Retrospectively, we do have an optimistic sentiment throughout the majority of the end of the year but could see a gloomy end to it all.
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