Why am I optimistic about the US stock market?

Posted on Posted in Trading tips

Hi there!

Are you negative about the perspectives of the US stock market? Well, that’s easy to be pessimistic in the context of massive bearish sell-offs, which we had seen recently.

But what about now? If you ask me, what I do, I will tell you that I hold several stocks, thus, having skin in the game. And below, I will explain to you why I consider rebound of stock indices highly probable, which means that we may see that soon.

First, we see that we have the decreasing volume as the market goes down. Take a look at QQQ (Nasdaq ETF), and you will see that most recent bearish swings were accompanied with the decreased volume. Usually, that means insufficient participation of the long-timeframe sellers in the process. And, guess what? It is a sign of rather a range-bound market conditions than bearish ones.

QQQ was knocking at the 200-day moving average door 3 days ago. It is another sign of insufficient supply (the market has to auction higher to attract sellers).

 

 

 

 

 

 

What about market leaders? If you take a look at Amazon, for example, you would notice that it holds quite steadily. And there are plenty of stocks which do just the same (CIEN, TWLO e t.c.) It is a sign that in a leading technology sector things are going not so bad, and they may drive NASDAQ and S&P500 forward.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There are other factors, which play on the bulls’ side, like earnings and other fundamentals. They are beyond the scope of our today’s article.

I just wanted to show you that being emotional and negative about stocks may not reasonable. They are bearish signs in this market as well, but I’d say, that we now we don’t have a clear picture. It’s not definitely a “strong short” perspective.

 

Keep your head in the game! Good luck and have a good trading ahead!

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