S&P500 - monthly chart
Weekly US market outlook for August 18-24
The S&P500 index shows that the US market dived into a strong correction and reached a 3% decline to the MA 50. The market also managed to rotate and touch its maximum levels again. Therefore, what looked like a strong correction occurred to be a deep breath before the next upward run. The US market chart is starting to resemble a speculative bubble. It is skipping the obvious downsides as for the high inflation rate in the US (+5.4% in July yearly) and the monetary policy tightening in November, according to the Fed's statement. A recent boom in the US real estate market complements the picture – demand for homes is increasing, despite the past surge in prices.
Weekly indices:
Dow Jones 35230 – 35330
S&P500 4440 – 4480
NASDAQ 14640 – 14940
Outlook:
Dow Jones range 35200 – 35500
S&P500 range 4440 – 4520
NASDAQ range 14800 – 15200
In conclusion, the US stock prices are definitely not favorable for long-term investment, but only for short-term speculation. Investors are expecting a large correction.
The US market growth rate has accelerated sharply since April 2020 and has not slowed down until August 2021. The S&P500 index bounced away from its MA 50 by a staggering 1300 points or 30%. Starting from the spring of 2009, right after the 2008-2009 crisis, the economic growth of the US market has reached its final stage.
