Outlook on S&P 500: is the index set for a fall?
With the US benchmark, the S&P 500, having breached the 5000 level for the first time, questions are being asked as to how much further upside is in store.
IGTV’s Jeremy Naylor caught up with RW Advisory technical analyst Ron William who looks through the charts that would suggest a drop is coming, but there may then be a recovery, possibly to another new record high, but that is then likely to bring about a bigger drop. This being an election year brings a special dynamic, but the long-term outlook is that there is a retracement on the way, it’s just about timing. The interview also covers where the money will be made when the drop does take effect.
(AI Video Summary)
The current state of the market
The current state of the market is making people wonder how much higher stock prices can go before there is a correction. We're uncertain about what will cause this correction, but it's a good idea for investors to start thinking about potential risks and making short-term adjustments to their strategy. The market has been doing well, but there are signs that things may start to settle down and go back to normal this year.
Ron William, a market expert, talks about the technical and fundamental aspects of the market in a video. He shows a radar screen that displays the risk-on trend, with the US, Japan, and India performing particularly well. Interest rates have gone down, which is providing some support to the market at the moment. While the market is still high, there are indicators that it may start to shift.
The S&P 500
The S&P 500 a popular stock index, is on the verge of reaching a new record high, and people are feeling anxious about potentially missing out on gains. However, caution is necessary because the market is overbought, meaning it's due for a healthy correction. The market currently shows signs of extreme momentum, fragility in rotation (changes in which sectors are performing well), and risks that are uneven in terms of timing.
The BANG 2.0 portfolio
There seems to be a pattern in the market that resembles previous periods of volatility caused by inflation. Ron suggests that investors consider investing in real assets like commodities and precious metals to protect themselves against market risks. He mentions a mix of sectors called the BANG 2.0 portfolio, which historically has performed well during volatile and uncertain times.
Gold
Speaking of gold, there is potential for it to reach higher prices as it tests and breaks above the $2,000 level. Gold is seen as a safe investment during times of currency devaluation and geopolitical risks. Ron predicts that gold could even surpass $3,000 due to factors like currency devaluation, people investing in safe havens, and increased demand.
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