Technical Analysis: US market outlook – Sell in May and Go Away? May 3, 2021 362

  • The Federal Reserve remain Dovish and remain rates unchanged at 0.25%. Jerome Powell acknowledge that the economy is picking up to speed with the ongoing vaccination process. However, he shut the door on any idea of rate hike until the economy and inflation rate is stable.
  • S Personal income soars with the aid of the stimulus package and change in attitude towards spending has return to pre-pandemic levels.
  • S GDP grew 6.4% misses the estimated 6.5% growth rate QoQ. However, the growth rate exceeded the post GFC levels.

 

The weekly expanded wedge is wave IV of the cycle phase and since its rebound last March 2020, the upside remain strong and the ongoing intermediate phase has completed wave (1)-(2) of the intermediate phase. The ongoing upside is the ongoing wave (3) and that said, it will be the strongest upside in near term. However, we do factor in some minor correction before reaching the target at 36,615 level.

 

 

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About the author

Profile photo of Chua Wei Ren

Chua Wei Ren
Technical Analyst
Phillip Securities Research Pte Ltd

Wei Ren specialises in Technical Analysis and has 11 years of experience in studying classic technical price action. He also study and research extensively on Elliott wave theory, Dow Theory. He believes that history plays an important role in how the market is reflected in the future.

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