Monthly Archives: December 2019

Quo Vadis?


As the year draws to a close, we should consider what is likely to happen next year on world markets. Undoubtedly, world markets will continue to follow what happens on Wall Street so we will confine our discussion to this market.

Once the traditional fear of October month was behind us, the S&P500 began making a series of new record highs. This is not unusual. Over the festive season it is quite normal for there to be a “relief rally”. If the market did not crash in October, it is extremely unlikely to crash over the year end. The thoughts of investors turn to the new year and the promise which it holds. Consider the chart:

S&P500 Index June to December 2019 – Chart by ShareFriend Pro

You will notice that the current upward trend is accelerated. From breaking above the previous record high of 3025 (made on 26-7-19) this index has risen by 166 points or 5,4% in less than 2 months. The 5,4% to reach that level of 3025 took almost 7 months to achieve. This acceleration indicates a growing confidence in the future of the US economy. However, as a word of caution, nothing in the markets moves in a straight line – so you should expect some sort of correction in the fairly near future. Read More

The Confidential Report – December 2019


America

The strong upside break of the S&P500 index above its previous cyclical high at 3025 shows that the potential for a “triple top” formation is now behind us – together with October month. Consider the chart:

S&P500 Index January 2018 to December 2019 – Chart by ShareFriend Pro (Click to Enlarge Image)

There had been some concerns among investors that the rising triple top (with tops in Jan 2018, September 2018 and July 2019 shown above with the red circles) would predicate a new bear trend potentially from October 2019. October is traditionally a scary month for investors following the collapses of 1929 and 1987.

We never had that opinion. We always thought that the underlying power of the booming US economy would drive share prices higher in a continuation of the great bull market which began in March 2009. The S&P has powered ahead and is more than 4% above the last of the tops in a strong new upward trend. On average, the S&P has gained about 1,7% in December month. While markets tend to have lower volumes because of the holiday season, once October is past there is usually a relief rally through to January of the new year. Read More


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