empty
12.02.2025 11:09 AM
Jerome Powell Fails to Impress Markets

This image is no longer relevant

The wave analysis of the 4-hour SPX chart remains ambiguous. On the daily chart, a global five-wave structure is evident, extending beyond even the smallest zoom scale of the trading terminal. In simple terms, U.S. stock indices have been rising for a very long time. But as we know, trends eventually reverse.

Currently, Wave 5 within Wave 5 is still forming. The S&P 500 (#SPX) has attempted three times to break the 6,093 level, which coincides with the 200.0% Fibonacci extension of Wave 4. A correction or a series of corrective waves is likely soon. The U.S. stock market appears overheated, and more experts are warning of a potential "bubble."

A completed a-b-c-d-e corrective structure is visible. The trend from January 13 appeared to form a new five-wave impulse, with Waves 1 and 2 completed. However, Monday's decline disrupted this structure, making it unclear and unreliable. The daily chart structure is more reliable and should be prioritized. Wave analysis must be clear and straightforward—complex structures are harder to trade profitably.

The #SPX remains near record highs, with investors unwilling to sell major U.S. stocks. The uptrend started nearly two years ago, fueled by slowing U.S. inflation and expectations of Fed rate cuts. The rate-cut narrative has been in play for months. The stock market has already factored in Fed easing expectations. Further stock gains may be limited, as the Fed is still hesitant to cut rates aggressively.

Fed Chair Jerome Powell testified before the Senate in a semi-annual hearing. His prepared remarks were published last week, but Monday's session focused on Q&A from senators.

Key messages from Powell are the following. Monetary policy is far less restrictive than before. The U.S. economy remains strong, allowing the Fed to delay rate cuts. A rapid or aggressive rate cut could hinder disinflation. A slow or minimal rate cut could weaken economic activity and employment. The Fed bases rate decisions on all incoming data. Inflation remains elevated, meaning the Fed is not ready to shift to a more dovish stance anytime soon. If the economy remains strong, restrictive policy will stay in place longer. The Fed will only resume rate cuts if the labor market weakens sharply or inflation declines significantly faster than expected.

This image is no longer relevant

General conclusions

Based on #SPX analysis, the index appears to be in the final stages of its uptrend. Short-term trading should be guided by the 6,093 level and Trump's trade policies. Trump's recent trade decisions (tariffs, import restrictions) pose risks to U.S. economic stability. Stock market bubbles continue to inflate, increasing the risk of a significant correction.

The 4-hour chart allows room for three more upward waves. However, the daily chart suggests that the rally is nearing completion. I place more trust in the daily timeframe, which signals a reversal is coming.

A clear five-wave structure is evident on the larger timeframe. Wave 5 appears to be nearing its completion. A prolonged and complex correction is likely on the horizon.

Key Principles of My Wave Analysis:

  1. Wave structures should be simple and clear. Overly complex patterns often lead to misinterpretation and unreliable trades.
  2. If market conditions are unclear, it is best to stay out.
  3. Absolute certainty in market direction is impossible. Always use Stop Loss orders to manage risk effectively.
  4. Wave analysis should be combined with other technical and fundamental tools. Diverse strategies lead to more informed trading decisions.
Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

Mercado bursátil el 6 de mayo: los índices SP500 y NASDAQ bajo presión

Según los resultados de la última sesión regular, los índices bursátiles estadounidenses cerraron a la baja. El S&P 500 cayó un 0,64%, mientras que el Nasdaq 100 descendió un 0,74%

Jakub Novak 12:07 2025-05-06 UTC+2

Mercado bursátil el 5 de mayo: los índices SP500 y NASDAQ no lograron mantenerse en los máximos

Al cierre de la última sesión regular, los índices bursátiles estadounidenses terminaron en alza. El S&P 500 subió un 1,47 %, y el Nasdaq 100 aumentó un 1,51 %

Jakub Novak 13:53 2025-05-05 UTC+2

Mercado bursátil el 2 de mayo: los índices SP500 y NASDAQ siguen en turbulencia

Al cierre de la última sesión regular, los índices bursátiles estadounidenses terminaron en alza. El S&P 500 subió un 0,63 %, y el Nasdaq 100 aumentó un 0,52 %

Jakub Novak 07:32 2025-05-02 UTC+2

Mercado bursátil el 30 de abril: los índices SP500 y NASDAQ seguirán aferrándose a cualquier buena noticia

Al cierre de la última sesión regular, los índices bursátiles estadounidenses cerraron en positivo. El S&P 500 subió un 0,58% y el Nasdaq 100 aumentó un 0,55%. El Dow Jones

Jakub Novak 09:55 2025-04-30 UTC+2

Mercado bursátil el 29 de abril: los índices SP500 y NASDAQ mantienen posibilidades de crecimiento

Al cierre de la última sesión regular, los índices bursátiles estadounidenses mostraron un comportamiento mixto. El S&P 500 subió un 0,06%, mientras que el Nasdaq 100 cayó un 0,10%

Jakub Novak 08:47 2025-04-29 UTC+2

Mercado bursátil el 28 de abril: los índices SP500 y NASDAQ detuvieron su crecimiento

Al cierre de la última sesión regular, los índices bursátiles estadounidenses terminaron en positivo. El S&P 500 subió un 0,74%, mientras que el Nasdaq 100 aumentó un 1,26%

Jakub Novak 08:16 2025-04-28 UTC+2

Mercado bursátil el 25 de abril: los índices SP500 y NASDAQ regresan al crecimiento

Al término de la última sesión regular, los índices bursátiles estadounidenses cerraron con ganancias. El S&P 500 subió un 2,03%, mientras que el Nasdaq 100 aumentó un 2,74%

Jakub Novak 10:06 2025-04-25 UTC+2

Mercado bursátil el 24 de abril: los índices SP500 y NASDAQ hicieron una pausa en el rally

Al cierre de la última sesión regular, los índices bursátiles estadounidenses finalizaron al alza. El S&P 500 subió un 1,67% y el Nasdaq 100 avanzó un 2,50%. El Dow Jones

Jakub Novak 08:25 2025-04-24 UTC+2

Mercado bursátil el 22 de abril: los índices SP500 y NASDAQ siguen perdiendo posiciones

Al cierre de la última sesión regular, los índices bursátiles estadounidenses terminaron en caída. El S&P 500 cayó un 2,36%, el Nasdaq 100 descendió un 2,45% y el Dow Jones

Jakub Novak 08:49 2025-04-22 UTC+2

Mercado bursátil el 21 de abril: los índices SP500 y NASDAQ volvieron a caer en medio de nuevos rumores

Al final de la última sesión regular, los índices bursátiles estadounidenses cerraron de forma mixta. El S&P 500 subió un 0,13%, mientras que el Nasdaq 100 cayó un 0,13%

Jakub Novak 08:48 2025-04-21 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.