FreeFX video 117: critical break or reversal for SPX500?

Hello traders, in this first day of August, the question on many people’s minds is: will the #SPX500 resume the dominant (down)trend, or break higher?

Watch my video to learn more.

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See you in my next.

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I don’t even trade SPX500 but I’m watching the video right now! :sweat_smile:

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Thank you, @ria_rose , I responded to your comment on YouTube as well. My videos have gone very niche/narrow in terms of content, as I only talk about what I trade, which is just the S&P500… Some people may not find that so interesting :slight_smile: I hope the videos are useful in some way :slight_smile:

Saving to watch later
by the way could you give me one opinion ? i’m trading just the us500 by the premise of the price rarely goes down, the trend is always up, consideering that us500 is made up of only the most profitable companies, what do you think of this opinion?

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@peterma may have a lot to say about this, maybe, so I am including him in the conversation.

@BrunoBorelli I would say this: https://www.optuma.com/im-a-survivor/ We tend to look at bull trends
as the main condition of markets, however (as the article highlights) not all companies make the selection and eventually we have a weeding-out of companies from an index: therefore, when you are looking at the performance of the S&P500 you need to realise that survivorship bias is at play when it comes to downplaying its downside potential - this is especially true when backtesting a trading idea with software.

Also, it depends on your outlook, but the index will regularly ‘rinse’ exposure, e.g. 2000, 2008, 2018, 2020, and this year (2022): each of these can bite someone investing, not necessarily someone trading. Myself, I made good profits shorting the index from February to July, and I am currently also in short positions, If you are trading (rather than investing) on this index, you should be able to be going long or short with equal ease, unless being Brazil-based you are not allowed to short it.

PipMeHappy

GREAT ! thanks for your time explaining it to me, also if you have some material to study that you find usefull will be highly appreciated, I was away from the market for a while and I’m coming back now, I want to delete all the useless information and focus only on what will serve me from now on!
I’m operating the us500 with the minimum lots and exposing myself very little, just to be able to catch longer movements even if the graph goes against me, I’m leaving the service now and I’m going to watch your video!

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No probs, @BrunoBorelli I am quite new to index trading in a way, I dabbled in it before
but was always just trading forex.

If there were any particular topic/question that you would be interested in, please post a comment about it here or under my video(s) on YouTube and I will be happy to steer you toward further reading materials ,

Happy viewing/trading

PipMeHappy

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Hi PMH

First congrats on the CTA - apologies if I’m wrong but don’t think so - I’ve this memory thing :slight_smile:

Anyways you are correct about stock index rinsing - companies have to perform to be in the top 30, 100 or 500 - rinsing and winners are bedfellows.

Winning in business is about risk - just like trading - no risk and no win.

The market is a risk environment and getting to sense that risk is key, Back in Oct 2019 Caesar in the notthenoobs commented to Kaitsu "I think you’re right about the S&P positive outlook" - he cited political/economics in his thinking - he sensed the risk - and he was right.

There are many variables in the risk environment and they change from day to day - e.g. right now the S&P is on the rise so one would expect energy likewise - yet oil is falling.

How come? - seems that US gasoline usage/demand is back to 2020 levels - itchy sell fingers and risk is risk :slight_smile:

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Bruno - if thinking about the S&P then just a wee thought - think not like a trader but rather like an investor.

Investors already have money and are seeking more - (they refer to it as ‘return’).

So the first place they go to are the small companies - right here is the possibility of the new Apple/MFST etc. - they will be found in the USD2000

Then look to techs - that’s the leading industry 21st century.

Then think about S&P sectors - e.g. defensive vs offensive

Edit: - an example today - the S&P held steady but there was a sector loser - energy.
Mention made re oil above.

S&PSectors

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