SAMT Blog
S&P500: a brief trend analysis
05. May 2020, by Mario V. Guffanti
Technical Analysis
Sell in May and go away? After the sharp rise of the last 28 days is it the case to "run away" from the stock market? As usual it is necessary to remain calm and consider what is happening. The market surprised in the decline, but also in the last and sudden rise. Many professional investors were waiting for lower prices to buy, and such a fast and robust rise has somewhat displaced the bearish expectations for potential shopping prices in the stock market. Elon Musk tweeted that Tesla's shares are too high and Warren Buffet, in his annual meeting, announced that he had decided not to lend large sums to companies, as he did during the financial crisis, because the Berkshire fund does not find attractive opportunities.
In late March, I wrote an article that recalled that human behaviour in the financial markets is cyclical and dependent on emotions (fear and greed) that have historically been recurring. So in the historical graphs we can find patterns, behavioural patterns between sellers and buyers, which can somehow recall the current situation and can be used as working hypotheses to assess likely future trends: the cyclicities observed over different periods of a curve can be comparable regardless of their historical context.
In the case of the S&P 500 index, given the deep fall of the curve in a very short period of time, an indicator was used to detect the rat...
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