Despite Trade War! rhetoric in the media, so far, the US stock market has not been showing any signs of a bear cycle similar to 2000 or 2008. In fact, in the last month, signs have appeared to be positive that there is a strong possibility of a continuation of an uptrend, with the $SPY breaking through two uppermost resistance levels, although corrections might also take place within the next two months.
As one can see we are far from the 243 area where a bear cycle would be immediately imminent. The $SPY broke through two resistance levels at the 161.8% fibonacci retracement level and the uppermost trend support in last month’s formation which signals that a continuation of the uptrend is more likely than an imminent bear cycle.
There is also a tendency for mainstream media outlets to correlate news to movements in the stock market, but I tend to think that most price movements occur before public knowledge or the news are actually announced. If we examine Tesla ($TSLA), in which its CEO Elon Musk has been accused of market manipulation with his tweets on twitter, its stock price has been following a predictable pattern independent of his tweets for several years, in which there is a strong uptrend every 4 years, whilst it ranges and moves sideways in a snake-like formation in between. Following this pattern, there is a strong possibility that Tesla could produce a strong uptrend signal between June-July 2020 and move towards the 495-528 level by Dec 2020.
$TSLA could be ranging sideways until June-July 2020 when there is a potential for a strong uptrend signal and could reach the 495-528 level around Dec 2020.
It has also been announced that Jack Ma will be retiring from Alibaba completely in 2020; although with disputing reports in the media, one wonders whether this retirement was “fast-tracked” rather suddenly? One might also have noticed recently that Alibaba has looked extremely bearish in the last few months and there is a possibility that Alibaba ($BABA) will move towards the lowermost support by March 2019. As a note, Altaba ($AABA), formerly Yahoo ($YHOO), which was acquired by the Altaba Inc. NY financial firm has a price movement that looks strangely similar to Alibaba and also seems to be following a similar potential bearish outlook towards 2019.
The Alibaba ($BABA) and Altaba ($AABA - formerly Yahoo $YHOO) stocks have been strangely following near identical patterns and could be bearish and moving towards the lowermost support level by Mar 2019.
As I mentioned before, most news outlets like to correlate movements in the stock market with the news itself, but it is my belief that movements in the stock market occur independently of the news, and that the news outlets are typically the last to know after significant movements in the stock market already occur several weeks to several months before. There is of course, market psychology, in which events such as Sept 11 fuel a fire of fear that drives a downtrend deeper into a bear market and also the rise of Bitcoin in 2017 in which media hysteria and mass marketing pushed the prices of Bitcoin to new highs, but usually I find that stocks have a unique pattern signature of their own, similar to musical compositions, and that the news is entirely independent of movements in the stock market.
Currently, the $SPY has approximately 2 more months before the current mountain formation is completed, but it appears to look as if a bear cycle is not immediately imminent although there is also a possibility of a minor correction in the next two months. The $SPY broke through two resistance levels in the last month and is safely above the 243 level that would have projected the next couple of years to be a bear market. Although, some stocks do look bearish, and we are not completely out of the woods yet, it appears that the US Stock Market and US companies will prevail in what has been called, “Trump’s Trade War”.
By Sierra Choi
Disclaimer: This article is for educational purposes only and is not intended as stock market, investment nor financial advice.
This article was first published in www.globalfounders.london