Welcome to our weekly newsletter on the S&P 500. This week, the S&P 500 experienced a 0.8% gain, reflecting a relatively volatile trading period.
After breaking out of the wedge formation discussed in last week’s update, the index saw significant movement. The S&P 500 enjoyed a strong rise on Monday, followed by a sell-off on Tuesday, but then recovered as the week progressed with more gains up to Thursday. Despite the ups and downs, the overall weekly gain stood at 0.8%.
Looking at the four-hour chart, we can spot a green trend channel that acted as both resistance on the upside and support on the downside. Over the last few days, the index has started trading outside this channel, signaling the potential for a short consolidation period. Investors should watch these developments carefully, as they could set the tone for upcoming market moves.
Our last position, which we placed on August 8th, has been active until September 5th, when we sold it for a gain of 7.7%
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Election Volatility on the Horizon
Since reaching a low in August, the S&P 500 has surged by an impressive 15.3%. On the daily chart, there hasn’t been much change, with the index still sitting at the top of a rising wedge formation. The orange trend line represents support on the downside, while the red trend lines, originating from the weekly chart, have become resistance on the upside.
The S&P 500 broke below these red trend lines in August, which had previously been a support level. Since then, the index has repeatedly attempted to rise back into the red lines, but has been rejected each time. Now, as the S&P 500 moves closer to these trend lines, it seems likely that the upside potential is limited.
Despite the potential for small gains in the near future, the market appears to be overbought. A correction back to the orange trend line seems probable in the coming weeks, especially with the looming uncertainty around the U.S. elections on November 5th. With volatility expected, it’s crucial for investors to remain cautious and monitor the situation closely.
For subscribers it is very important to follow our risk management measures that we provide with all our services to protect against losses in case support zones break
Die nächsten Monate
The chart shows the typical seasonality for the S&P 500 during an election year, indicating patterns of market behavior around key months. Historically, we see a tendency for market weakness in May, June, and July, followed by a period of strong price gains up to early September. However, this is usually succeeded by a larger correction leading up to the election at the beginning of November. The period from mid-June to the end of July is characterized by some market softness, with only modest upward movement, which aligns with the recent declines we’ve witnessed. As we in October, which is historically a weaker month of the year, we may continue to see this pattern of volatility. Given the historical data, there could be further weakness until the U.S. election on November 5th. However, it’s important to interpret this seasonality with caution, especially this year, as we have already experienced a significant rise in prices. Investors should consider both seasonality trends and our analysis for a balanced view. Proper risk management is essential in navigating these market conditions.
Unser Markt-Dashboard bietet einen schnellen Überblick über die aktuellen Marktbedingungen und, was noch wichtiger ist, das damit verbundene Risiko. Unten sehen sie ein Chart eines unserer Tools, des Risiko-Level-Indikators. Es zeigt das prognostizierte Risiko von 1998 bis 2024. Wenn Sie interessiert sind, können Sie hier unsere Dashboard-Seite besuchen..
Die Welt der Finanzen ist komplex und umfasst viele Fachbegriffe. Für die Erklärung dieser Begriffe empfehle ich das Lexikon von Investopedia. Investopedia dictionary.
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