Based on the 1H chart, we see a nice breakout of the bearish trend with a support at 2800.60. That is the first buying zone.
We are expecting the price to move higher towards first to 2863.30 and then 2889.60.
What we know for certain :
1. President Trump has a vested interest to shore up the stock market. His time is running out with his controversial reopening of some states, receiving some negative reactions from the ground.
2. Fed will continue to pump more liquidity to the market and if needed, interest rates can be slashed to negative.
3. Warren Buffett airline stocks disposal - More than just a sell order, his actions are highly regarded in the market. He is telling us the airlines , tourism industry will not be out of the woods so soon. Then why are retail traders picking up these stocks when the wise man is selling all of it ? Is it following his words of "buy when others are fearful?"
What we are not so certain :
1. Vaccine - we know companies are developing it but is it like what President Trump claims by year end or later ?He wants to tie it nicely to his re-election so the closer the dates the better.
2. Gaps in coronavirus peak and clusters - We are still seeing high numbers in Russia, US, India, Spain,etc. When will the virus peak in these countries before they flatten the curve ?
3. Mixed views from analysts - It is not how serious or damaging this coronavirus is going to affect the economy that we want to know. There are plenty of reports on that already. Why are they not telling us what we want to know ? How will this impact the stock market ? Are they just as unsure as the retail traders since this is an unprecedented event ?
Armed with this information, I think trading based on what I see on the chart is the best option. As it is, it is a buy for now.
We are expecting the price to move higher towards first to 2863.30 and then 2889.60.
What we know for certain :
1. President Trump has a vested interest to shore up the stock market. His time is running out with his controversial reopening of some states, receiving some negative reactions from the ground.
2. Fed will continue to pump more liquidity to the market and if needed, interest rates can be slashed to negative.
3. Warren Buffett airline stocks disposal - More than just a sell order, his actions are highly regarded in the market. He is telling us the airlines , tourism industry will not be out of the woods so soon. Then why are retail traders picking up these stocks when the wise man is selling all of it ? Is it following his words of "buy when others are fearful?"
What we are not so certain :
1. Vaccine - we know companies are developing it but is it like what President Trump claims by year end or later ?He wants to tie it nicely to his re-election so the closer the dates the better.
2. Gaps in coronavirus peak and clusters - We are still seeing high numbers in Russia, US, India, Spain,etc. When will the virus peak in these countries before they flatten the curve ?
3. Mixed views from analysts - It is not how serious or damaging this coronavirus is going to affect the economy that we want to know. There are plenty of reports on that already. Why are they not telling us what we want to know ? How will this impact the stock market ? Are they just as unsure as the retail traders since this is an unprecedented event ?
Armed with this information, I think trading based on what I see on the chart is the best option. As it is, it is a buy for now.
