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The world markets are rallying but my money is on this one index!

by , 07 April 2022
The world markets are rallying but my money is on this one index!
It looks like things are finally heading up with the world's markets since Russia invaded Ukraine in late February.

In fact, from the middle of February 2022 we have already seen the markets move up including:

7.6% for the JSE All share index
11.2% for UK's FTSE 100
8.8% for the Dow Jones 30

But that's not all…

The star index that I see major upside to come is showing the most promising return.

In fact, it's closed out their second consecutive winning week up over 3.9%, showing its biggest weekly gain since 2020.

Also, it has completely erased its losses since the Russian invasion.

And most sellers (short-sellers) are exiting out of their positions, as one significant level has been breached. (More on that in a bit).

I've never been more bullish about an index before. Can you guess which index I'm talking about?

It's the American index with the most companies listed on the market.

I'm talking about the S&P 500.

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Here’s why I expect a 457 point move up for the S&P 500 in the next few weeks
Jobless claims are at the lowest since 1969.

I was so thrilled to read this statement from the Labour Department on Thursday.

They claimed it’s the first time the jobless claims in America reached the lowest tally since 1969.

The weekly jobless claims in the U.S came in at 214,000, which was hovering around historical low levels despite the Covid crisis and the tight labour market.

You see in February the unemployment level was 3.8% with 678,000 non-farm payrolls added

And this was just the start.

Economists now expect the March jobs report to show even better results.

They expect 460,000 jobs to be added in March and for the unemployment rate to fall to 3.7%.

Edward Moya, senior market analyst at Oanda said:
“Geopolitical risks remain very elevated and the rally in equities over the past two weeks is impressive. The U.S. economy is still in good shape.”

The more jobs that are added, the lower the unemployment rate.

This will bring more revenue and confidence. And this will attract more local and international investors to buy the American markets including the S&P500.

Is this the start of the end of the Russian invasion?

In late February, Russia invaded the Ukraine. We saw stock markets crash world-wide.

We saw the S&P 500 crash down to the lowest level since May 2021 to 4,100.

Investors fled the markets, went to safer havens and we just saw red all over the equity markets.

Now in March there have been Peace talks taking place between the two nations regarding cease-fire. The Kremlin spokesperson Dimitry Peskov told reporters the discussions are likely to resume about the peace talks.

In fact, with the delegations from both countries travelling to Turkey, the S&P500 is up about 3.9% higher in March. This put the S&P 500 on pace for the biggest gain since late 2020.

Not only that but, the index has erased all of its losses since the invasion.

This tells me traders and investors have had time to re-assess and relook at the impact the War in Ukraine will have on the U.S stock market. And the charts agree 100%.

Why this W Formation is showing a 457 point move up soon!

 
 

In the daily chart of the S&P 500, we can see it’s been moving in a sideways pattern since 19 January 2022.
 
This pattern is known as a W Formation (shaded area).
 
Basically, this formation has two rounding bottoms, that resemble the letter ‘W’.
 
Now that the pattern is complete and the price has broken out of the W Formation, it means we should see more buying for the S&P 500 which will help pick up in price.
 
To calculate the price target, we’ll take the difference between the high and low of the formation and we’ll add it to the high.
 
Price target = (High - low) + High
                  = (4,600 - 4,143) + 4,600
                   = 5,057  

We should therefore expect the price to pick up all the way to 5,057 in the next few weeks.

Also, if you look at the chart again, you’ll see the price has closed above a significant indicator.

I’m talking about the 200MA (Squiggly black line).

All you need to know is when the price is above the 200MA over an extended period, the overall trend is up thanks to the buying power.

This is because the 200MA is one of the top indicators that every trader looks at when buying an index.

Also, more buyers and investors flood the market and the majority of short-sellers exit their positions.

This will continue to drive the price higher.


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First, I’ll buy the S&P500 CFDs and hold them until it hits my price target of 5,057.
 
Second, you can
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The world markets are rallying but my money is on this one index!
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