EUR/USD climbed towards 1.07
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S&P: what lies ahead?
Information is not investment advice
The S&P is down to 3,000 after a recent high at 3,200. A logical question is: how deep will this drop go?
The answer is: it’s still too early to raise alarm.
First, we have advised previously that the way further upwards at these heights will be more horizontally protracted compared to what it was before, and it may not necessarily fall into a clear bullish trajectory. Sideways intermezzos will take place just like it is now.
Second, even in the previous periods of bullish leaps since the March reversal, there were episodes (B, C) where the S&P did make a lower high and seemed to be bending downwards. On the below chart, you can see that there were at least three episodes where the S&P’s uptrend was crossed by bearish moods and notably trembled. As much as it dropped in the very recent episode A, the S&P did not yet change the uptrend. While the highs of the A1 trendline go lower, the lows of A2 still look upwards. The same was happening most of May: while the B1 curve bends downwards, higher lows of B2 are still in a bullish trajectory.
For this reason, tactically, we are still in an expected sideways-bearish period that did not even yet break out from the previously observed patterns. Let’s watch it closely then and adjust our estimations accordingly. So far, there is a further sideways trembling and an expected upswing ahead.
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