What does Wall Street expect from SP500 by the end of the year?

26.10.2018 / 09:53

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No matter how appealing the index prices look, investors have to oppose insistence on purchases, many Wall Street analysts say, using technical analysis to predict price movements.

According to Chris Verrone, Head of Technical Analysis at Strategas Research Partners, the panic indicators on the market are at relatively low levels, while the price has been able to adjust significantly. This means that the bad is yet to come.

Jeff deGraaf, of Renaissance Macro Research's, shares caution by predicting that the SP500 will head to the bottom of the year at $2533.

If we look at the volume-based ARMS index, the probability of a deeper decrease is also high. While at the beginning of the year it passes several times over 2, it is currently below this value, while SP fell with the same percentage change.

The optional market also lacks panic, as VIX manages to keep well below the levels observed in February.

In addition, if the price really tests the area around $2500, the trend trend line from 2009. will fall and then the lightest scenario will consist of the index going into consolidation.

Technically, the price has been able to stay long below the main support zone, formed by a major trendline of 2016, 50% Fibonacci correction of the last ascending wave and 200SMA. In view of this and the poor foundation of the war, I expect the bulls to be less ambitious, despite the good reports of some companies. Entry from the current levels, regardless Long or Short, is unsuccessful, and the more likely scenario remains, a bottom test formed in February and April.

We stay in Stand By mode until a strong support zone is formed, where we are looking for a good Price Action for long-positioning.

Source: Bloomberg Finance L.P.

Charts: Used with permission of Bloomberg Finance L.P.

Trader Petar Milanov

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What does Wall Street expect from SP500 by the end of the year?

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