Market Trend: The S&P 500 (SPY Stock) continues its downward trend.
Looking at the SPY for the year and we see that the market continues to make lower lows and lower highs.
SPY stock took a big hit on Wednesday during JPOW’s speech, dropping from $405 to as low as $396.
The index closed at $399.40 but continues to be on a downward trend.
Zooming out to the full year and we see the SPY started off in January at $477 per share.
By the end of the first quarter, we see a high of $461 per share and a low of $417 per share.
In June, we see a low of $365 and a peak of $426 by the third quarter of 2022, in August.
This fourth quarter, SPY stock had a low of $348 in October, and a high of $414 in December.
SPY Downtrend Chart – Franknez.com.
Will The Stock Market Go Up Soon?
Will the stock market go up soon? Will stocks go up?
Based on the current trend we’re seeing from the S&P 500, it doesn’t seem like the market is ready for a bull run anytime soon.
Buyers failed to break the downward trend as seen in the figure above which means the probability of sellers coming in again is high.
In terms of the economy, inflation is still high at 7.11% and mass layoffs have been seen with DoorDash, Amazon, Facebook (META), Twitter, Netflix, Carvana, and many other companies.
Although JPOW said the U.S economy is currently not in a recession, both Bank of America and Wells Fargo CEOs expect a recession to hit the country during the first quarter of 2023 with some sort of light at the end of the tunnel by Q4.
“While retail payments surged 11% so far this year to nearly $4 trillion, that increase obscures a slowdown that began in recent weeks: November spending rose just 5%,” Bank of America’s CEO Brian Moynihan said.
Wells Fargo CEO Charlie Scharf said, “there is a slowdown happening, there is no question about it. We are expecting a fairly weak economy throughout the entire year (2023).”
If this happens to be the case, today’s bear market may drag out through the majority of the new year.
Leave Your Thoughts Below
Do you see this downtrend in the stock market continuing throughout 2023?
The markets seem to be nowhere near a bounce as both stocks and crypto freefall; is now the time to buy or sell in the market?
If you’re part of the small percentage that’s in profit, maybe liquidating has come through your mind.
Especially if you’re looking to protect your capital and wait for other opportunities.
But what if your portfolio has suffered significant losses?
Is it best to cut your losses and conserve whatever cash you have left?
This article is going to provide you with perspective on ways to not only protect your cash during this nasty bear market, but also how to identify opportunities to multiply your wealth.
Let’s dive right into it.
Should You Buy or Sell?
Should you buy or sell in the market.
Whether you should buy or sell in today’s market conditions will depend on how liquid you are and on your future and current investment plans.
Value investors looking to add stocks to their long-term portfolios could benefit from buying the markets lows, though it’s important to keep in mind that the markets are still susceptible to fall.
Dividend stock investors could also benefit from buying these lows.
Diversified investors who are looking for the next opportunity may want to liquidate positions to have cash ready when the time is right for the next move.
Whether that be waiting for real estate opportunities or other markets to tumble, this will highly depend on an individual’s needs.
With so much uncertainty in the markets at the moment, the best thing investors can do is create a plan to guide their investment goals in the right direction.
Identify what you’re aiming to achieve when investing in the market.
Is it long-term capital gains?
Income?
And decide what it is you need to do now in order to meet your investment needs.
Stocks continue to bleed as the Fed struggles to maintain economic structure and institutional investors liquidate the market.
The NASDAQ and SPY have seen improvement in the past month, but economists, CEOs, and media influencers say the market has plenty of room to drop.
Stocks fell sharply on Wednesday, a day before CPI announcements.
Poor consumer reports could cause stocks to fall sharply again.
Traders should trade with caution.
With inflation affecting millions of families and corporations such as Netflix, Facebook (META), Twitter, and Tesla laying off tens of thousands of employees, a recession looms.
Whether you decide to buy or sell in today’s markets will ultimately depend on how liquid you are and whether you’re prepared to face a highly likely recession in the coming months to year.
Creating a plan and identifying what you can and cannot do financially as turmoil hits the economy is your best bet of riding this wave.
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The SPY continues to pull the market down
The SPY (S&P 500), which tracks the top 500 companies in the United States continues to pull the market.
Today the SPY is down more than 16% (year-to-date).
On average, the S&P 500 is up 8%-10%.
This is an incredible time to also take advantage of the S&P 500 as it has always set higher levels in the long-term.
However, the SPY is a great indicator of where the markets are going, and we can see AMC is no exception to this market downtrend.
And as the markets tumble, it’s important to concentrate on the opportunities in these conditions.
If you’re part of my private community on the Patreon you’ve seen I’ve been earning 10%-20% gains trading options every week.
This is one way investors may hedge against these market conditions.
The market doesn’t go down forever, eventually it has to come back up so taking advantage of lower stock prices today could bear profits as soon as the market goes into a reversal.
Some of the largest CEOs in the U.S don’t believe this bear market will linger which means at some point short sellers will begin to either take profits, cut losses, or close their positions breaking even.
This is when the markets could see a big reversal.
Analysts are crediting AMC for being able to massively improve their fundamentals BUT, there is always a but.
AMC’s current share price is still believed to be ‘irrational’ by these ‘experts’.
What’s irrational is lowering prices when the demand for something skyrockets.
You do not lower the price of lemonade on a hot summer day when there’s a huge line wanting to buy it.
But these ‘experts’ say that’s how it works.
AMC’s massive demand for the stock has not reflected in the share price for months now.
And even when the high volume began to show, regulators halted it back in March.
The people running the markets don’t like how the game is playing out and they’re essentially cheating.
So, although they might be orchestrating a ‘correction’, is it possible this ends out playing in retail’s favor?
Shills give AMC a $5.76 price target
Wall Street analysts are giving AMC a price target of $5.76.
But why does their ‘expertise’ even matter?
What makes their price target significant or valuable?
They acknowledge AMC is innovating like no other company with the use of NFTs and cryptocurrency, so why go backwards instead of forward?
Like Adam Aron said, these analysts only look through the rear-view mirror oppose to the front windshield – ahead.
And it makes absolutely no sense.
These old ways of thinking are what’s keeping the economy from striving.
Are institutions preparing to close massive short positions?
Are market conditions about to trigger AMC to squeeze?
Given the current market circumstances, we can see the market is struggling to find a bottom, or at least trying to get comfortable in one.
This could give way for short sellers to plan an exit strategy at low share prices to profit from.
The current market conditions provide short sellers who have been holding long short positions on AMC an opportunity to close before the markets begin to move up again.
AMC currently has a high short interest of 19.77%.
This short interest shows there are many short positions still open today that have yet to be closed.
The market meltdown we are seeing at the moment is setting up the perfect conditions for short sellers to close their positions, initiating a short squeeze in heavily shorted stock such as AMC.
Now, is this guaranteed?
Very few things in the market are guaranteed.
When stocks go up, they must come down too – and when stocks go down, they’re bound to go up.
At some point, short sellers will want to cash in their profits before they’re erased by an inevitable market reversal.
