EMA 8 and EMA 21 had been one of the first trend line showing the market sentiment over the past few months. Recently, the bearish cross among the two EMA appeared and the market had struggled to keep going up and faced sell off while trying to climb back higher.
However, current pattern seems like early June - mid July, where the SPX will consolidate before going further upwards. During this consolidation phase, I believe it is best to buy dips and sell rebounds.
We shouldn't be too bullish as obviously the EMA signals a temporary downtrend.
However, we shouldn't be too bearish due to the current interest rate environment, demand for yield by funds, liquidity provided by Fed. Therefore, being too bearish doesn't promise you a good reward as we won't see the previous sell off.
Fundamentally, we should be aware of how the stimulus package goes in late September, should there be 0/1/2 tn the market will be bearish/neutral/bullish.
However, current pattern seems like early June - mid July, where the SPX will consolidate before going further upwards. During this consolidation phase, I believe it is best to buy dips and sell rebounds.
We shouldn't be too bullish as obviously the EMA signals a temporary downtrend.
However, we shouldn't be too bearish due to the current interest rate environment, demand for yield by funds, liquidity provided by Fed. Therefore, being too bearish doesn't promise you a good reward as we won't see the previous sell off.
Fundamentally, we should be aware of how the stimulus package goes in late September, should there be 0/1/2 tn the market will be bearish/neutral/bullish.