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“SPX’s Wild Ride: What the Charts Say About a Possible Countertrend Rally

The stock market has seen its fair share of volatility lately due to the ongoing pandemic and related economic uncertainty. Despite this, some sectors have managed to stage impressive rallies over the past few weeks. According to recent chart analysis, the Standard & Poor’s 500 (SPX) index may be gearing up for another countertrend rally. Chart analysis can often provide insights into future market movements, and recent analysis has suggested that the SPX could be in for an impressive surge. On July 6, the index broke out of a two-month consolidation period and has since gained 8%. This is unusual activity for the index, which had been trading within a narrow range since mid-March. While some have suggested that the recent market volatility has been driven primarily by pandemic-related news, technical analysis reveals that the breakout of the two-month consolidation period was due to a shift in investment sentiment. According to the analysis, investors are becoming more confident in the U.S. economy and markets, and are beginning to see it as a safe haven from the global pandemic and its related economic fallout. The technical analysis also suggests that the SPX could be in for another sharp rally. This could be fueled by short-covering, as some investors who had taken short positions to take advantage of the weakened state of the market are now unwinding their positions to avoid further losses. There is also evidence that investors are beginning to take advantage of low interest rates by increasing their purchases of corporate bonds, which could drive stock prices even higher. The chart analysis suggests that the SPX could still have further to rally. If the index is able to maintain its current momentum, it could move even higher as investors become even more confident in the U.S. economy and markets. Of course, it’s important to keep in mind that the markets are still volatile and any number of factors from the pandemic to political news could impact the SPX. Investing in the stock market always involves a certain level of risk, but the recent technical analysis suggests that the SPX could be in for an impressive countertrend rally.