Please seek a financial advisor for any investment activity.
The stock market's peak in February was 6,147, and a 20% decline would bring it down to 4,917, which we could see today. There is solid support in the S&P 500 around the 4,800-4,600 range. A sharp drop of 25% would put it at 4,600, but it's hard to envision a market falling that much—down 25% in under two months.
However, let's look at this from a time perspective rather than focusing on percentages. If the market were to return to its December 2023 levels in April 2025, that would be a 25% drop, back to 4,600. Losing gains from the past 15 months doesn't seem far-fetched, considering the disruption of 75 years of free trade.
There is significant market support between 4,800 and 3,900, so the market will likely bottom and rebound. While I’m confident that after another positive rally, the market will face another failure, if you're considering selling, in my opinion, today isn’t the right time, as the market is likely to counter-rally.
If today's low is around 4,800, it's quite possible the market will bounce back to 5,500, about 15% higher. In my view, if you don’t believe tariff wars will drive the stock market higher in 2025, that’s a good level to consider reducing risk.
I plan to close out some puts today or tomorrow if there's any sign of real strength.
Good luck!
No comments:
Post a Comment