Account

New to ADSS? Open an
account now to get started.

OR

Already have an account?

Add funds to your ADSS account

Account

New to ADSS? Open an
account now to get started.

Add funds to your ADSS account

Trends & Analysis
News

Crude oil spikes on US inventories report

News

Does Apple have more room to run?

News

Gold spikes to new highs on Fed remarks

News

GBP/USD price may correct lower

News

Goldman Sachs’ stock surges on upbeat Q2

News

Caution ahead of Netflix’s earnings?

Trends & Analysis
News

Crude oil spikes on US inventories report

News

Does Apple have more room to run?

News

Gold spikes to new highs on Fed remarks

News

GBP/USD price may correct lower

News

Goldman Sachs’ stock surges on upbeat Q2

News

Caution ahead of Netflix’s earnings?

Asset Watch

Risks on the horizon for the S&P 500?

Thursday July 11, 2024

With the S&P 500 posting double-digit returns in 2024 alongside relatively muted volatility, investors have enjoyed a prolonged period of tranquillity. And as a potential correction catalyst hover on the horizon, Morgan Stanley’s Chief U.S. Equity Strategist Mike Wilson said on Jul. 8 that “I think the chance of a 10% correction is highly likely sometime between now and the election,” and that Q3 is “going to be choppy.”
He cited uncertainty around the U.S. presidential election in November, Q2 earnings season (starts on Jul. 12), and Federal Reserve policy.
Consequently, you should monitor a few key indicators to determine if the S&P 500’s risk-reward remains attractive.

The index’s momentum has slowed on the weekly chart. While the S&P 500 makes higher highs, its weekly RSI has made lower highs. The same development occurred in early 2020 and late 2021 (marked by the vertical white lines), as the RSI descended in advance of the index. While 2020 and 2022-style bear markets are highly unlikely, a correction could be in the cards.

Providing the perfect support combination, the index retested and confirmed the breakout above the March 2024 highs near 5,265. Likewise, a pullback to this area is aided by the 20-week moving average, which currently sits near 5,267. The S&P 500 bounced off the 20-week MA in April 2024, making it an important level to watch. As such, if volatility strikes, this could be a nice zone to play for a bounce.

If not, and the rally continues uninterrupted, look to the 5-week MA for momentum clues. The index only closed below the metric once from late October 2023 until early April 2024, which makes a long position justified when it holds.

So, is caution warranted after such a strong run, or will the wall of worry push the S&P 500 even higher?


Site by Pink Green
© ADSS 2024


Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.

ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.

The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.

ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.