“The S&P 500 seasonality study suggests that the equity markets could be in for a pullback in the second half of July”, says Alessio Rastani from LeadingTrader as he joins the Tip TV Studio to discuss ‘emotions’ in markets, the S&P 500 seasonality effect and what’s ahead for coal prices. Rastani is also joined by Zak Mir, Technical Analyst at Zak’s Traders Cafe.
Key Quotes
“Emotions can be a strong contrarian indicator. CNN Money’s Fear & Greed index shows extreme greed..it does not mean market is going to top out. In 2014 this index was over 90.00 but markets continued to rally anyways.”
“Fear and Greed index above 90.00 does not mean a sell signal, but did cause a retracement in the stock market in 2015.”
“S&P 500 Seasonality – another reason why we could see a pullback in second half of current month. 64 years of data shows that in the second half of July during election year we see a fall in stocks..does not mean it is a crash. It is more of a pull back or retracement, which is a buy opportunity.”
“July has never formed a 12-month top, hence full confident we are going to see a new higher after a possible July pullback.”
“A bear market in coal is very likely over. A new uptrend is in the making. Both presidential candidates - Trump & Clinton – are likely to support coal miners hence coal is likely to be the biggest gainer once election uncertainty is out. Buy the dips, could yield 400% rally in next few years.”