• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Investing Should you buy or sell the S&P 500 index after failing to hold above 4,000 points?
Investing

Should you buy or sell the S&P 500 index after failing to hold above 4,000 points?

by December 20, 2022
by December 20, 2022 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

2022 turned out to be the year of central banks tightening their monetary policy. Even the last major central bank that did refuse to tighten gave up today, as I wrote here.

When central banks embark on a tightening cycle, risk assets are hurt. After all, why would anyone invest in the stock market for an uncertain return when they could buy a risk-free asset such as the US-10 year and lock in a great (and certain) return?

We should not, therefore, be surprised that US stocks delivered negative returns for the year with just a few trading days left. However, looking ahead, the outlook for US stocks is not that grim.

Fed’s aggressive tightening cycle hurt stocks in 2022

The Federal Reserve of the United States is the most influential central bank in the world. After all, it reigns over the US dollar – the world’s reserve currency.

Tightening this year was abnormal. This is one of the most aggressive tightening cycles ever, meaning that stocks had a hard time exiting the bearish trend.

However, inflation is coming down in the United States. As such, the Fed is at risk of tightening too much.

Judging by the last inflation reports, the aggressive tightening cycle is near its end. If that is the case, then 2023 might be a great year for stocks.

S&P 500 failed at dynamic resistance – again

From a technical perspective, the S&P 500 was in a perfect bearish trend in 2022. A bearish trend has a series of lower lows and lower highs.

Until the series is broken, the bear market is still ongoing.

S&P 500 chart by TradingView

The chart above shows the 2022 price action, and the series of lower highs is not broken. Effectively, it means that the rally from the October lows is, for now, just a bear market rally.

It appears that the S&P 500 must hold above 4,000 for a while before attacking the lower high in the 4,300 area. Such a move will break the dynamic resistance that acted as a technical barrier for bulls throughout the trading year.

The post Should you buy or sell the S&P 500 index after failing to hold above 4,000 points? appeared first on Invezz.

You Might Also Like
  • Should you buy Deere stock after its upbeat guidance for 2023?
  • Costco stock maintains a symmetrical triangle pattern. What this means for the price
  • Southwest Airlines is doing significantly worse than its peers
  • Stephanie Link just bought a homebuilder stock
Share
0
FacebookTwitterPinterestWhatsapp

previous post
The installed base of fleet management systems in Australia and New Zealand to exceed 2.3 million units by 2026
next post
OKX Chain launches Liquid Staking with up to 40% APR

You may also like

Is Lululemon Athletica eyeing a Santa Claus rally to the...

December 7, 2022

Key Apple supplier reports a big hit to revenue in...

December 5, 2022

Top 4 US banks reporting quarterly earnings this week

January 9, 2023

“Buy the close, sell the open” still rewards for carrying...

November 28, 2022

Lebenthal is ‘cautiously optimistic’ as Disney preps for proxy fight

January 12, 2023

High Probability Strategy: A Holy Grail of Options Trading?

March 24, 2023

Metropolitan Bank Holding (MCB) exits the crypto market

January 9, 2023

Coinbase, Galaxy Digital shares rise sharply as stocks surge

December 29, 2022

40+ Spotify statistics 2022: SPOT stock, revenue and performance

December 2, 2022

AMC shares opened 25% down on Thursday: find out more

December 22, 2022

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters renovation

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025
    • OpenAI to release web browser in challenge to Google Chrome

      July 10, 2025
    • Sports executive charged with bid-rigging in Texas arena project

      July 10, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,631 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,919 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,607 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,577 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,451 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters...

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Glencore share price dived amid ESG...

    January 5, 2023

    Binance’s CZ among experts to teach...

    December 8, 2022

    2 takeaways after area PMIs hint...

    November 24, 2022
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here