Since November 2023, the S&P 500 has been on a steady climb, spanning six months without a significant pullback to the moving average (MA). Typically, such pullbacks are necessary for price stabilization. However, recently, we've observed a pullback accompanied by considerable volume. This suggests that a substantial portion of market participants anticipates a market retracement.
It's essential to note that institutional investors hold a significant portion of capital in the market. Moreover, many businesses, particularly those with substantial earnings, have been reporting quarterly decreases. Coupled with persistently high interest rates, this paints a bearish picture in my perspective.
I believe we're poised to continue on a bearish trajectory until inflation levels reach a more favorable range. Once this occurs, interest rates are likely to decrease, stimulating the market and initiating a new bullish movement.
Until then, my outlook remains bearish for the S&P 500 and consequently, the stock market as a whole.
It's essential to note that institutional investors hold a significant portion of capital in the market. Moreover, many businesses, particularly those with substantial earnings, have been reporting quarterly decreases. Coupled with persistently high interest rates, this paints a bearish picture in my perspective.
I believe we're poised to continue on a bearish trajectory until inflation levels reach a more favorable range. Once this occurs, interest rates are likely to decrease, stimulating the market and initiating a new bullish movement.
Until then, my outlook remains bearish for the S&P 500 and consequently, the stock market as a whole.