SPX: Be Careful Shorting in 2020; What to Expect Overall
In this idea I'm going to explain why for those who are hoping for some big crash in 2020 won't see it and what to expect in 2020.
Firstly, to begin, let me say that the recent issues between US-Iran is short-term noise. A pullback was bound to happen early in 2020 and it just-so-happens this was the trigger to cause it. This will not impact the long-term 2020 sentiment of the market even if the market drops another 1, 2, 3, 4 or 5%. Generally this will be an excuse for precious metals to form a new base, and for oil to remain elevated for the entire year.
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One of the most prominent reasons the crash won't happen in 2020 is based on monetary and fiscal policy around the world. Central banks around the world are incredibly supportive of easing and money-printing at current time. This will continue to push markets higher for the next 12+ months (overall) until interest rates are too low to reduce and/or when monetary money printing loses its high. Will there be pull-backs and corrections? Yes, but these will be bought in-time.
Secondly, often times as the economy is in a weakening stage around the world this is bullish for stocks even though it is incredibly counter-intuitive. Why? If the economy shows signs of strengthening, investors and big whales believe this means rates may rise, but on the flip-side if economic data weakens drastically, that gives the sign that some big recession is near. Economic data will indeed weaken (again) by mid 2020 (and yes, yields will fall significantly again), however, it will remain afloat enough for big whales to continue to push markets higher.
Thirdly, on a technical level, the end goal of the SPX is roughly near 4000 which represents the highest peak on the longitudinal channel based on EW theory. The key is when do we get to the 4000 level? The answer is it seems that sometime in 2021 is the most prominent bet based on micro/macro-economics, technical analysis and pure logic. Therefore, as we move closer to 2021 and through 2021 investors should monitor their portfolios very carefully.
Fourthly, put simply, is Trump. Trump has done a remarkable ability to manipulate the market for algo-bots to buy off of. 2020 will be yet another year of more trade deal talks and hype around future phases. This will continue to work in 2020 before too weak of economic data and the top region of the longitudinal channel outweigh the manipulation as stated above.
In reality, 4000 seems like a super-high level but in reality it represents only an 18-19% gain from where we are at the time of writing.
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In 2020 the way you want to hedge equities during any correction or pullback is through precious metals not by holding shorts. Contrary to what any naysayer believes, precious metals are on the verge of a historic and parabolic run for the next 4 or 5 years. 2019 was the beginning of the run, 2020 will see slightly more upside than 2019 (especially for Silver and Platinum), and the run will really start to move in 2021.
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Top sectors to buy for 2020 --
1) Energy stocks: be patient as it will take 1-2 months of oil above 60 for money to flow into the sector - this will happen so be patient. Oil will rise steadily this year and many people have been shorting it to death and likely blew their accounts wide open. 68 is in the books for oil; 76 is also in the books in-time. If there is any Middle East tension oil could reach 90 or higher.
2) US tech: certain companies like Amazon, Apple, Tesla, Facebook, Baba, Bidu and so forth will have an excellent year. Look for Amazon to break-out; Apples run to continue and Facebook to be the dark-horse of the tech sector where 40-50% gain is possible this year.
3) Precious Metals: if you haven't invested in metals in 2019 you want to make sure you buy on pullbacks in 2020 - make sure you don't neglect Platinum!
Look for many Chinese stocks to have a solid year.
--
zSplit
Firstly, to begin, let me say that the recent issues between US-Iran is short-term noise. A pullback was bound to happen early in 2020 and it just-so-happens this was the trigger to cause it. This will not impact the long-term 2020 sentiment of the market even if the market drops another 1, 2, 3, 4 or 5%. Generally this will be an excuse for precious metals to form a new base, and for oil to remain elevated for the entire year.
--
One of the most prominent reasons the crash won't happen in 2020 is based on monetary and fiscal policy around the world. Central banks around the world are incredibly supportive of easing and money-printing at current time. This will continue to push markets higher for the next 12+ months (overall) until interest rates are too low to reduce and/or when monetary money printing loses its high. Will there be pull-backs and corrections? Yes, but these will be bought in-time.
Secondly, often times as the economy is in a weakening stage around the world this is bullish for stocks even though it is incredibly counter-intuitive. Why? If the economy shows signs of strengthening, investors and big whales believe this means rates may rise, but on the flip-side if economic data weakens drastically, that gives the sign that some big recession is near. Economic data will indeed weaken (again) by mid 2020 (and yes, yields will fall significantly again), however, it will remain afloat enough for big whales to continue to push markets higher.
Thirdly, on a technical level, the end goal of the SPX is roughly near 4000 which represents the highest peak on the longitudinal channel based on EW theory. The key is when do we get to the 4000 level? The answer is it seems that sometime in 2021 is the most prominent bet based on micro/macro-economics, technical analysis and pure logic. Therefore, as we move closer to 2021 and through 2021 investors should monitor their portfolios very carefully.
Fourthly, put simply, is Trump. Trump has done a remarkable ability to manipulate the market for algo-bots to buy off of. 2020 will be yet another year of more trade deal talks and hype around future phases. This will continue to work in 2020 before too weak of economic data and the top region of the longitudinal channel outweigh the manipulation as stated above.
In reality, 4000 seems like a super-high level but in reality it represents only an 18-19% gain from where we are at the time of writing.
--
In 2020 the way you want to hedge equities during any correction or pullback is through precious metals not by holding shorts. Contrary to what any naysayer believes, precious metals are on the verge of a historic and parabolic run for the next 4 or 5 years. 2019 was the beginning of the run, 2020 will see slightly more upside than 2019 (especially for Silver and Platinum), and the run will really start to move in 2021.
--
Top sectors to buy for 2020 --
1) Energy stocks: be patient as it will take 1-2 months of oil above 60 for money to flow into the sector - this will happen so be patient. Oil will rise steadily this year and many people have been shorting it to death and likely blew their accounts wide open. 68 is in the books for oil; 76 is also in the books in-time. If there is any Middle East tension oil could reach 90 or higher.
2) US tech: certain companies like Amazon, Apple, Tesla, Facebook, Baba, Bidu and so forth will have an excellent year. Look for Amazon to break-out; Apples run to continue and Facebook to be the dark-horse of the tech sector where 40-50% gain is possible this year.
3) Precious Metals: if you haven't invested in metals in 2019 you want to make sure you buy on pullbacks in 2020 - make sure you don't neglect Platinum!
Look for many Chinese stocks to have a solid year.
--
zSplit
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