Stock market at concerning price levels, should you be paying attention?
It’s no secret that all through October 2018 Investors were fearful up until February 2019 when the market saw a miraculous return from the end of year lows. Some very bright individuals with a track record of predicting the recessions through the years are forecasting that we will again see one in the next 24 months. Just earlier this week JPMorgan was speaking at a conference and are predicting the recession to happen in a years time.
JPM also is heeding warning in not jumping on the recent rally in the treasuries… and in our opinion rightfully so. This rally since January has been built on almost no foundation and low volume considering the gains since then. This is in a sense concerning considering the stock market can act like an escalator letting participants in and off at various price levels to create a stabilization of support levels. By this idea if the market is to fall lower than the green line highlighted below - there may not be as much support to keep the price levels stabilized. Furthermore if we do breach that lower price level again, there will be a strong case technically that we continue lower to test the lows of the end of December.
We understand, there are bulls and bears watching the market and those placing their bets on both sides of the spectrum. We also understand there are many smart investors putting their money into alternative assets such as Art, Businesses, Cryptocurrency, Antiques, and more. These assets may yield a suitable return on investments during macro events that can impact the markets.
This is not financial advice, this is simply my market view currently.
Disclosure: I am currently short SPY via puts.
-Justin Benfaida, USPI