MarketBeat.com | Jun 22, 2022 02:18AM ET
Equities began the week with a strong bounce and the S&P 500 gained more than 2.6% by midday. As strong as the bounce looks, however, we still don’t think this is the energy sector .
If we’ve said it once, we’ve said a dozen times that higher oil prices in the face of rising demand are driving windfall profits in the energy sector that should be sustained into calendar 2023 at least. The fundamental picture in the energy sector is dwindling capacity and supply and that can only lead to higher prices. The takeaway is the energy sector should do well this year and the better they do the worse it is for every other sector.
h2 The S&P 500 Broke Out Of A Downward Sloping Channel/h2We’ve been tracking several technical conditions in the S&P 500 that suggest a downward bias in price action if not a continuation of the downtrend that began earlier this year. The major pattern that is dominating the price action is a Head & Shoulders Reversal that should take the S&P 500 down to the 3480 level and it is still well above there. The most recent pattern we’ve been tracking is a downward sloping channel that demarcates the downtrend that began at the end of 2021/beginning of 2022. That channel should take the price down to our 3,480 price target on its own but the price action broke out of this channel to the downside. In this scenario, we see the S&P 500 decline accelerating, not reversing, and moving quickly down to the 3,480 level if not surpassing it.
The risk for the market lies in the Q2 earnings and there is a weak foundation for the market .
There are other influential names giving gloomy forecasts as well. So far, we’ve seen Wharton professor Jeremy Seigel, JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon, bond-guru Mohamed El-Erian, and even Jim Cramer give dire forecasts for stocks and the economy. The takeaway here is that fear of a major recession is growing and it’s time to be frugal with cash. As for the minor recession? It’s already here.
Original Post
/h2
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.