Do not be fooled by the records

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European and US futures markets are trading down due to the lack of significant signs of easing on the part of China. The fact is that if economic data and corporate profits continue to improve, such a measure is not necessary. In fact, it was the strong earnings of US companies that pushed the S & P500 and Nasdaq to their highest level yesterday. The S & P 500 Index closed at 2933, while the Nasdaq Composite Index closed at 8120.

Not so long ago, the S & P500 index dipped to 2351 in December. At the time, it was generally accepted that no powerful catalyst could bring the markets back to record levels. However, the speculators were wrong. The Fed has changed its stance on its monetary policy, the Muller report has been less damaging than expected, the Brexit tragedy is still somewhat under control, the trade war has almost cooled and worries about corporate growth and profits have been exaggerated.

The S & P 500 index is up 17% since the beginning of the year, while the Nasdaq and Dow Jones indices have recorded respective gains of 22% and 14% since the beginning of the year. 39; year. Looking at these numbers, it is clear why investors can suffer from FOMO or worry about not taking advantage of it. Nevertheless, the markets fully recovered from the brutal sale that began late last year.

The question for us now is to know where it can go and what could be the next catalyst for such a gathering?

The answer is rather simple; corporate profits must remain strong. & nbsp; Until now, the reporting season shows that almost 79% of companies have exceeded their earnings estimates. That said, we did not witness a mbadive participation of hedge funds or so-called institutional money . Recent CFTC data shows that the bullish sentiment of the S & P has declined by 36%, meaning we have more short positions in the market. This shows that smart money is ready to make big banks if the market falls again. Plus, one thing is certain regarding smart money; he does not like to play the catch-up game.

So, the safest bet is to have insurance in your wallet. The VIX volatility index is incredibly cheap, down 51% since the beginning of the year. Given the record highs of the market, it makes perfect sense to buy volatility at its lowest level. I'm not saying that the main landmarks are out of breath. It is highly likely that the S & P 500 index will continue to move towards the level of 3,001. This is the next major resistance. It would be wise to buy insurance while maintaining an optimistic view of the index, based on the benefits and accommodative position of the Fed.

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European and US futures markets are trading down due to the lack of significant signs of easing on the part of China. The fact is that if economic data and corporate profits continue to improve, such a measure is not necessary. In fact, it was the strong earnings of US companies that drove the S & P500 and Nasdaq to their all-time high yesterday. The S & P 500 index closed at 2933, while the Nasdaq composite index closed at 8120.

Not so long ago, the S & P500 index dipped to 2351 in December. At the time, it was generally accepted that no powerful catalyst could bring the markets back to record levels. However, the speculators were wrong. The Fed has changed its stance on its monetary policy, the Muller report has been less damaging than expected, the Brexit tragedy is still somewhat under control, the trade war has almost cooled and worries about corporate growth and profits have been exaggerated.

The S & P 500 index has risen 17% since the beginning of the year, while the Nasdaq and Dow Jones indices have recorded respective gains of 22% and 14% since the beginning of the year. ;year. Looking at these numbers, it is clear why investors can suffer from FOMO or worry about not taking advantage of it. Nevertheless, the markets fully recovered from the brutal sale that began late last year.

The question for us now is to know where it can go and what could be the next catalyst for such a gathering?

The answer is rather simple; corporate profits must remain robust. Until now, the reporting season shows that almost 79% of companies have exceeded their earnings estimates. That said, we did not witness a mbadive participation of hedge funds or so-called institutional money . Recent data from the CFTC show that the bullish sentiment of the S & P index has declined by 36%, which means we have more short positions in the market. This shows that smart money is ready to make big banks if the market falls again. Plus, one thing is certain regarding smart money; he does not like to play the catch-up game.

So, the safest bet is to have insurance in your wallet. The VIX volatility index is incredibly cheap, down 51% since the beginning of the year. Given the record highs of the market, it makes perfect sense to buy volatility at its lowest level. I'm not saying that the main landmarks are out of breath. It is highly likely that the S & P 500 index can continue its progression towards the level of 3,001. It is the next major resistance. It would be wise to buy insurance while maintaining an optimistic view of the index, based on the benefits and accommodative position of the Fed.