REOPENING THE WORLD...
March 2020...the world came crumbling.... locking its doors from external visitors. Do you remember that time of panic, filled with anxiety and fear? The first month of lockdown was a quiet one, roads was practically empty and we rarely went out.
Things today are already a little different, we go by our normal lives, moving around although with a little caution at the sides. 1 April, our borders are more open with less restrictions or even requirement for quarantine... we see throve of people coming in and out of our country, something we had not been able to do freely for the past 2 years. The same situation to many countries which had since opened up.
Since we can't fight it, many countries are going to live with it. Although some countries like China still go by the policy to reduce Covid to Zero! Something indeed an uphill task considering there is no cure but only precautionary vaccines.
So which is right or wrong? Open up the world or close it to make it a safer place? Only time will tell.
Until then, lets enjoy it and get back to our normal lives, the one we miss a lot, the one which gives us freedom to move around and do the things we love.
SPX
SPX broken above the 4600 level but subsequently retraced below back to around 150 MA level and closed at 4545 for the week.
SPX was in fact down on Friday but was subsequently squeezed up to close positive for the day. Due to the sharp 11%+ recovery in a short 2 weeks timeframe, it will not be surprising to see a retracement back to 200 MA.
Short term, SPX has not proven itself for a full uptrend reversal as the 50 MA is still below the 200 MA. Nevertheless, VIX has gone down below 20 last week. If it can continue to go down to 16-17 level, and SPX can maintain above 200 MA, then we would have a more positive outlook for SPX to recover higher as market participation will likely comeback pushing the index back to its high.
NDX
NDX closed 14861 last Friday. Although higher for the week, it has bounced off resistance at the 150 MA. Most component stocks has gone to overbought territory and looking for a slight breather now.
Yield curve 2 year vs 10 year was briefly inverted last week was not too positive for the market as it is seen as a precursor sign of recession. Short term bond holders get paid more than long term holders.
Stronger economy data and unemployment rate slightly improved against estimate may also lead way for the Federal Reserve to accelerate rate hikes, which is not good to tech sector and also Nasdaq index as a whole. Next rate hike is expected in May and as now, 25 basis point is on the table but if the economy looks better, higher hikes might be expected.
50 MA as the next level of support at 14300 points.
Nasdaq futures opened slightly red on Sunday evening.
TRADERS TALK
Did you hear last week's Traders Talk?
We had a great topic and so much insight on trading was given out.
We were off last week. The last one we had was on 21 March 2022. Listen to Traders Talk Series 41 if you have not done so. View Past Traders Talk
Remember to join us every Tuesday 7.30 pm on my Facebook Page. Follow-us so you will be notified when we go live!
DISCLOSURES
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MYstyework is an Online Financial Literacy Educator and materials provided is solely by MYstylework and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. MYstylework, through its contents, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. MYstylework is not in the business of transacting securities trades or an investment adviser.
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