Support and Resistance – Investors Decide on Stock Market
With bounces and falls throughout the last volatile trading week, investors will be waiting to see if the market will test new lows or rise and rally as it did this past June. Alongside every bear market comes bear market rallies, which are points in resistance where people try to hedge their bets on attractive, cheap investments. However, the chances of another big rally will rely on investor sentiment, and current polls state that 56% of individual investors believe the market will be lower six months from now.
Despite the Fed’s previous raising of rates, the economy has persisted with high inflation, treasury yields, and mortgage rates. These metrics have loomed over the heads of investors, causing anticipated worry and pain to markets. On the contrary, the S&P 500 now trades at 15.7 times its projected earnings, which is down considerably from 21.5 times in December of last year. Investors believe that if the market has accurately priced in the effects of poor economic data, then there is hope for a considerable rally. As there is no Federal Reserve meeting in October, investors this week should be looking forward to both existing-home sales data and earnings from big corporations like Tesla, Netflix, Bank of America, and more.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.