Global Equities In Big Trouble? / Technical Chart / SP500
Updated
A geopolitical environment that is stalling growth, a divided American people & government, and a looming showdown between the Federal Reserve and the Street... Are the global markets truly on a precipice?
Let's get into this breakdown.
The technical pattern that is emerging is quite clearly a head and shoulders. If we break the neckline we are looking at a decline setting the market back to the beginning of 2017. Is this all doom and gloom? Will it happen quickly and violently? No it most likely won't. The fundamentals underpinning this current market are still there, albeit on shakier ground. US GDP growth is projected to start slowing down (it wasn't sustainable for long to begin with), and passing more corporate tax cuts is not the gimme it once was for the current administration.
What does this all add up to? A long overdue winding down of a record bull market. This isn't 2008 all over again necessarily, and I don't think you will see (yet) a panicked rush for the exits. Right now, it is important to consider your trading strategy and mindset for 2019.
What am I looking for?
1) Opportunities to take advantage of risk-off sentiment (follow the money out of risk-on instruments and into safe havens)
2) Opportunities to buy 'value' stocks at cheaper prices as especially tech keeps shedding its gains
3) Slowly start going to cash. Being in cash is one of the best trading positions to be in. It means you're not out of ammo and shooting blanks when the big moves start happening.
Good luck in these upcoming weeks and months. We'll see what the future holds.
Never forget - your #1 responsibility as a trader is to preserve your capital.
Let's get into this breakdown.
The technical pattern that is emerging is quite clearly a head and shoulders. If we break the neckline we are looking at a decline setting the market back to the beginning of 2017. Is this all doom and gloom? Will it happen quickly and violently? No it most likely won't. The fundamentals underpinning this current market are still there, albeit on shakier ground. US GDP growth is projected to start slowing down (it wasn't sustainable for long to begin with), and passing more corporate tax cuts is not the gimme it once was for the current administration.
What does this all add up to? A long overdue winding down of a record bull market. This isn't 2008 all over again necessarily, and I don't think you will see (yet) a panicked rush for the exits. Right now, it is important to consider your trading strategy and mindset for 2019.
What am I looking for?
1) Opportunities to take advantage of risk-off sentiment (follow the money out of risk-on instruments and into safe havens)
2) Opportunities to buy 'value' stocks at cheaper prices as especially tech keeps shedding its gains
3) Slowly start going to cash. Being in cash is one of the best trading positions to be in. It means you're not out of ammo and shooting blanks when the big moves start happening.
Good luck in these upcoming weeks and months. We'll see what the future holds.
Never forget - your #1 responsibility as a trader is to preserve your capital.
Note
Well, well, wellTrade active
Having come really close to the target and then not quite hitting it... a bit frustrating.I am closing half this position now and moving stop to the entry point.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.