Technical analyst Sven Henrich discusses the possibility of S&P reaching 9000 by 2028. Topics include market highs, interest rate cuts, trend line analysis, bifurcation in the global economy, technical analysis of S&P chart, market dynamics, liquidity impact on market movements, wealth inequality consequences, and navigating economic uncertainty.
The possibility of S&P reaching 9000 by 2028 hinges on market correction or a significant bull run.
Fed's communication strategy lacks consistency, causing market uncertainty and potential volatility.
Reduced exposure to certain indices advised due to market gains, emphasizing cautious approach and readiness to capitalize.
Deep dives
Current Market and Economic Assessment by Sven
Sven Henrich, a technical analyst, discusses the current market and economic environment characterized by significant bifurcation. He highlights the extreme wealth inequality, societal, economic, and political divisions, with significant market cap expansions driven by big tech companies and unprecedented wealth concentration. Sven presents a critical view on the Fed's reactive approach, lack of strategic planning, and the risk factors associated with asset bubbles and exaggerated valuations.
Fed's Communication Strategy and Market Impact
Sven criticizes the Fed's communication strategy for being overly proactive, causing market uncertainty and confusion. He emphasizes the downside of excessive Fed speaker engagements and the lack of a strategic framework, leading to inconsistent policy signals and potential market volatility. Sven stresses the importance of Fed communication aligning with market expectations and maintaining a forward-looking approach.
Asset Class Strategies and Portfolio Adjustments
Sven shares insights on asset classes, indicating reduced exposure to NASDAQ and S&P indices due to excessive market gains. He suggests maintaining a cautious approach, particularly in small-cap stocks, considering potential liquidity disruptions and confluence support levels. Sven advises a long position with reduced exposure and readiness to capitalize on market opportunities.
Risks of Excessive Market Expansion and Policy Implications
Sven warns about the risks associated with unprecedented market expansions driven by AI technology and emphasizes the speculative nature of market valuations. He discusses the potential limitations of market control by central planners and the challenges in achieving sustainable growth amid inflated asset prices. Sven highlights the need for proactive policy measures to address wealth inequality, inflation concerns, and potential market corrections.
Fed's Management of Recessions and Market Expectations
Sven debates the Fed's role in managing recessions and market expectations, highlighting the challenges of maintaining economic stability and responding to market shifts. He underscores the need for a proactive and forward-looking Fed approach to policy changes and strategic communications. Sven expresses concerns about the Fed's reactive stance and the potential implications for market volatility and economic sustainability.
Well, the markets are back at all-time highs and central banks around the world are increasingly talking of interest rate cuts...or actually making them.
Will that take asset prices even higher from here?
Are we in a new golden era for stocks?
To find out what the technicals are telling us, as well as to dig into the macro side as well, we're fortunate to speak today with Sven Henrich, technical analyst and publisher of NorthmanTrader.com.
Sven thinks we are at an important juncture, technically-speaking. Either a material correction is going to happen...or we're at the start of a much bigger bull run than we've seen so far. One potentially big enough to send the S&P to 9000 by 2028(!)
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#technicalanalysis #bullmarket #stocks
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