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Trends & Analysis
News

Week Ahead Preview: 22nd of April

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P&G shares rise despite Q3 sales miss

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Gold continues to shine amid geopolitical worries

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Crude oil dips for 3rd session after supply data

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GBP/USD recovers following wage report

Trends & Analysis
News

Week Ahead Preview: 22nd of April

News

P&G shares rise despite Q3 sales miss

News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

Asset Watch

Should you buy the S&P 500 dip?

Tuesday, August 8, 2023

August began with a whimper as bearish S&P 500 seasonality collided with higher interest rates and a downgrade of the U.S.’ credit rating. As August is known to be a choppy month, Fundstrat’s Tom Lee – a dedicated bull – told clients on Aug. 2 that “we are entering August just a bit more wary than other months.”
He noted the DeMark “13” signal flashed recently, and the last three times this occurred over the last 12 months, it preceded S&P 500 pullbacks of 19%, 8% and 9%. He believes investors “need to be vigilant” in the weeks ahead.

While the S&P 500 remains in an uptrend, playing the moving averages could be a wise way to remain invested and avoid a large drawdown. The index held above its 20-day moving average for more than two months before a breakdown occurred on Aug. 2. The key level has also become resistance, with an intraday rally above it reversing on Aug. 4, and the S&P 500 closing at the lows.

However, prior breakdowns were bought near the 50-day MA in April and May, so if the index approaches 4,406, aggressive traders may want to position for a reversal. A more conservative approach would be to wait for a bounce off the 50-day MA before executing.

Either way, should we be concerned when a long-term bull turns tactically bearish or will buying S&P 500 dips remain profitable in 2023?


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