Top.Mail.Ru
empty
01.07.2021 01:50 PM
Will there be a reversal in the stock markets?

The situation on the global stock markets requires clarification. One could say that the markets are very likely to decline, but everything is not as simple. Indeed, some stock markets have now formed patterns suggesting a possible end to growth and there are enough reasons for this – Fed's statements about the upcoming rate hike at the end of 2023. But as always, the behavior of the markets is not in our liking, and if investors can afford to enjoy the growth of stocks, then traders who have taken a position to sell stock indices ahead of time risk getting losses and closing positions without waiting for the quotes' decline.

If we talk about US stock indices, the situation is as follows. The Dow 30 index formed a bearish pattern (Fig. 1), the SP500 index formed a bearish configuration (Fig. 2), while the Nasdaq100 index formed a bullish configuration (Fig. 3). Based on Charle Dow's rule: "Indices must confirm each other". At the moment, it can be seen that there is no agreement in the indices, but this does not mean that the situation cannot change anytime. So, let's take a closer look at what patterns were formed by stock indices, and try to estimate the probability of a decline in stock markets in the future from one to three months.

This image is no longer relevant

Figure 1: Dow 30 Daily Index

It is already known that technical analysis is more of an art than an exact science, and where someone sees a double top, another will see a false breakdown and a continuation of the trend. So, let's express my viewpoint on the situation, but one shouldn't take my judgment as the ultimate truth.

Looking at the chart of the Dow 30 index, it is very likely that an upward reversal has already occurred, since the index formed a new low in mid-June, which is lower than the previous value in May 2021. A special case of this rule is the presence of a false breakdown, which will be formed only after the Dow 30 index renews its historical low at 35000 and fixes it for at least one week.

The MACD indicators are in a bearish zone, and the RSI indicator signals a further increase. If we estimate the probability of growth and decline as a percentage, then we will come up with a ratio of 40% for the growth and 60% for the decline. Despite the fact that a further decline in the index is expected, the probability of such an outcome of events is by no means 100 percent, which means that the formation of a false breakdown with a subsequent upward price movement will not be ruled out, given the possibility of continued growth in my strategies.

This image is no longer relevant

Figure 2: S&P 500 Daily Index

Now, let's consider the key stock index S&P 500. Its dynamics from April to June forms an ascending wedge. Based on the observations, this formation breaks down in 75% of cases. In addition, it shows the divergences of the MACD and RSI indicators with the chart. The so-called divergences can signal an imminent decline in the index. At the same time, it should be put in mind that the value of divergences is significantly reduced when working against the trend. For example, the index updated the next high again from April 15 to May 15 when a slight decline led to the cancellation of the divergence signal.

Currently, the probability of a decline and an increase on the S&P 500 chart would be estimated as 45 to 55 in favor of further price growth. According to my experience, the markets are designed in such a way that before the decline occurs, they can update the highs by a small amount for a long time. So, for example, the S& P500 index rose by only 2.5% from April 15 to June 30, which is not a very large value compared to the previous growth impulse.

This image is no longer relevant

Figure 3: The Nasdaq Composite Daily Index

Analyzing the Nasdaq Composite Index, it should be noted that this value cannot serve as a signal of a trend reversal despite the overbought RSI indicator At the same time, the MACD indicator is in a positive zone, which suggests further growth of the index. In the context of the analysis of divergences, it is necessary to note the breakdown of the divergence between the chart and the MACD indicator in the period February - May 2021. Despite the initial testing of the signal, the situation changed dramatically in May, and by June, the index updated the historical high again. The breakdown of reversal patterns - "double top" and "divergence" is a clear example of the fact that trends in the markets develop in real-time, and not in the static assumptions of analysts, investors, and traders.

It is also worth noting that the breakdown of the strongest reversal patterns is a significant signal indicating the possibility of further growth of the Nasdaq index. In this regard, we can say that there is a possibility of continuing the growth trend at 75%, against a 25% probability of a possible reversal and subsequent decline.

Moreover, if we talk about the probability in the trends of stock indices and any other instruments, an important factor of the time perspective should be noted. The daily time considers trends for the future from one to three months, which implies the probability of an increase in this particular time period. In other words, if the probability of an increase is currently estimated at 75%, this means that the index value will become higher than it is now in the period from one to three months.

Looking at the presented analysis, it is impossible to certainly say whether the markets will decline or continue their growth. It should be noted that the indices do not confirm each other and their directions contradict. Consequently, the best solution in this situation would be to refrain from any actions on the stock market, which does not exclude the purchase of shares of the most attractive companies.

.

Daniel Adler,
Analytical expert of InstaForex
© 2007-2025
选择时间框架
5
分钟
15
分钟
30
分钟
1
小时
4
小时
1
1
通过InstaForex赚取加密货币汇率变动的收益。
下载MetaTrader 4并开启您的第一笔交易。
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

推荐文章

XAU/USD。分析和預測。當前市場情況

從技術角度來看,四小時圖的黃金已經確立在100期簡單移動平均線(SMA)以下,這表明下跌可能會繼續。 此外,同一張圖表上的震盪指標是負值,儘管超賣。

Irina Yanina 18:27 2025-06-24 UTC+2

2025年6月24日至28日黃金(XAU/USD)交易信號:在3,327美元(21 SMA - 200 EMA)下方賣出

在美國交易時段早期,黃金大約在3,300附近交易,低於21 SMA和200 EMA。我們在最近幾個小時見到強勁的技術性修正跌破3,390,並且在當前價格水準實現技術性反彈是現實可行的。

Dimitrios Zappas 18:05 2025-06-24 UTC+2

2025年6月24-28日EUR/USD交易信號:於1.1620下方賣出(三重頂 - 8/8 Murray)

在美國交易時段早期,歐元在1.1616附近交易,顯示出強勁的上行趨勢,此前自5月初以來形成的牛市通道底部反彈。 目前EUR/USD交易的區域已證明是強勁的阻力。

Dimitrios Zappas 18:04 2025-06-24 UTC+2

外匯預測 2025年6月24日:歐元/美元、美元/日元、美元指數、英鎊/美元、石油和比特幣

有用的連結: 我的其他文章可在此部分查閱 InstaForex 初學者課程 熱門分析 開立交易賬戶 重要提示: 外匯交易的新手在做出入市決策時需要非常謹慎。在重要報告發布之前,最好保持觀望以避免因為市場波動性加劇而遭受劇烈波動的影響。

Sebastian Seliga 12:35 2025-06-24 UTC+2

2025年6月24日歐元/美元匯率預測

週一,歐元/美元在小時圖上兩次從1.1454的76.4% 菲波納奇回撤水平反彈,轉而支持歐元,並上升至1.1574的100.0% 菲波納奇水平,並於該水平上方鞏固。因此,上升趨勢可能會持續至下一個水平1.1645,進一步至127.2% 回撤水平1.1712。

Samir Klishi 10:48 2025-06-24 UTC+2

2025年6月24日英鎊/美元預測

在小時圖上,週一英鎊/美元貨幣對從1.3357–1.3373支撐區反彈,轉而支持英鎊,並鞏固在1.3425–1.3444區間和1.3527的127.2%費波納奇回撤水平之上。因此,上漲趨勢可能會繼續向下一個阻力區間1.3611–1.3633推進,英鎊正是從該位置一週前開始下跌。

Samir Klishi 10:44 2025-06-24 UTC+2

金價走弱的修正是否能推動其於2025年6月24日週二達到3320水平。

1. 市場情緒摘要: 在黃金昨日大幅上漲後,今晨黃金經歷了高達 -0.39% 的下行修正,這次修正是如今地緣政治狀況和昨日技術面市場動向組合的結果。昨日,黃金價格的走勢確實出現了與超買條件的背離,因此今日發生了修正是自然的。

Arief Makmur 10:43 2025-06-24 UTC+2

2025年6月24日歐元/美元匯率預測

週一,歐元成功突破了1.1535的線性阻力位和MACD線。從太平洋時段開盤開始,價格穩步上升,朝向1.1692的目標水平前進。

Laurie Bailey 04:51 2025-06-24 UTC+2

2025年6月24日英鎊/美元匯率預測

英鎊/美元 英鎊的多頭力量強勢地克服了空頭的壓力,空頭此前一直預期目標位為1.3208。然而,此刻,MACD線在1.3570的阻力即將被突破。

Laurie Bailey 04:47 2025-06-24 UTC+2

2025年6月24日美元/日元匯率預測

USD/JPY 週一的技術圖表可能會影響中期的走勢。一週以跳空上升開局,隨後形成了較長的上影線。

Laurie Bailey 04:44 2025-06-24 UTC+2
现在无法通话?
提出您的问题,用 在线帮助.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.