The Strategy for Speculation in the S&P 500, According to José Luis Cava

“At this time we’re going to think about two info that can inform us about March of financial exercise for the USA And they’ll enable us to take a sure viewpoint”, explains José Luis Cava, skilled on the markets, on his YouTube channel.

The primary amongst them is the GDP development information. GDP development has slowed sharply over the previous 18 months. Proper now, the US GDP development price is round 1%.


“Then, the primary conclusion we draw is that right here there isn’t any financial ‘increase’ And what’s most admirable is weak point.

If we take into consideration the inflation information, it may be seen that there’s a strategy of deflation,


“We’re not shocked as a result of we’ve got seen that The uncooked materials has declined by about 23% in comparison with final 12 months”, The skilled has additionally pointed to the decline within the worth of lumber, which has allowed the housing market in the USA to recuperate, giving a lift to the residential market, and therefore, builders’ pricing.

If we additionally add that banks have tightened lending situations, then a easy conclusion: “The Fed shouldn’t be going to boost rates of interest anymore, as a result of it has already reached a restrict,” says the skilled. Are.

Due to this fact, the query we’ve got to ask ourselves is the next: Why Are Federal Funds Futures Markets Pricing a Price Minimize to Start in July? “In my view, it’s as a result of the contributors of this market consider that the inflationary, deflationary course of, is about to decelerate exponentially.”

Maintaining this in thoughts, consultants level out that as speculators, they now should look solely and solely on the day the Fed cuts rates of interest.

On that day we are going to think about that the SP500 is about to start out falling and bonds are about to start out rising. And, as well as, with our speculative methodology, we consider at that time the bonds will begin to transfer very strongly and supply us with a superb shopping for alternative.

On debt ceiling, consultants level out that negotiation “It is pure theater besides it is bullshit.”

US officers stated on Thursday they’d nearly reached an settlement, a dramatic activate Friday as Republicans abruptly walked out of the closed-door assembly after it started an hour earlier, in response to the skilled.

Apart from, goal of sanction of credit score restrictIn accordance with Kava, it’s not to be overcome. However then Congress itself passes laws that features elevated public spending, elevated deficits, and elevated debt issuance. And when the debt reaches the restrict that they accredited, then they tighten up, they get fiscally tighter, and now they are saying that public spending should be managed.

So that they get collectively, come on the present. do you assume this can be a critical type management of public expenditure In a dialog in the USA through which the USA of America’s personal treasury is operating out of cash and this can be a notably harmful second due to the injury it may well do. If the debt doesn’t enhance, the USA financial system shall be hit arduous”, says Kava.

Consultants say, at a time when the US is confronting China, this example doesn’t go well with them, so it is senseless, they’re going to attain an settlement.

S&P 500 Evaluation

the very first thing we see is Greed amongst traders. The S&P 500 could proceed to rise as greed has not but struck.

fear and greed

The consultants have drawn a bullish guideline connecting the Could lows and we’ve got drawn a parallel line by the highs.

sp 500

To begin with, we’re going to repair the 4,190 mark. If the S&P 500 sustains above 4,190, the short-term bias will stay bullish. If it reverses, you need to open an extended place, concentrating on the 4,240 space, at all times trying on the high of the channel to promote.

When you pierce at 4,190, the goal in that exact case could be 4,156. However this is able to not be the time to open a brief place, because it may very well be a lure. The skilled follows his speculative methodology so long as the S&P 500 stays above 4,156, which signifies a bullish bias. “And if it bounces, we’ll purchase,” he says.

sp 500

One other situation could be a gap of 4,156. Then it’s important to watch out. And in that case we’ll see 4,130. If the S&P 500 breaks 4,130, look to the brief facet. “In that case, we’d await a cease, then a bounce and within the subsequent decline we’d search for the brief facet”, concluded Kava.