US STOCK MARKETS
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STOCK MARKET TREND DEFINITION
BEAR MARKET: DEFINITION. According to Forbes, economists define a bear market as a decline of 20% or more of a major stock market index, such as the NASDAQ 100, for a sustained period. SENTIMENT: During a bear market, market sentiment is poor. Investors are pessimistic about the stock market’s prospects, making them more likely to sell Instrument than hold them.
BULL MARKET: DEFINITION. While bear markets signal a time of pessimism and economic decline, a bull market is defined by optimism and economic growth. A bull market is a period when stock prices are rising and investor sentiment is positive. During a bull market, stocks in a broad market index increase in value by 20% or more from recent bottom. According to First Trust, the average bull market period lasted 6.6 years with an average cumulative total return of 339%.
Table I: Bear and Bull Market Characteristics
Data Source: Forbes
USA100 INDEX
- THE USA100 INDEX: TRANSITION FROM BEAR TO BULL MARKET
BEAR MARKET CONFIRMED in April, 2022. The Index fell 20% from 16,765.87 (November 21, 2021) to 13,412.70 (April 22, 2022). The market was there for 11- 12 months, having a maximum drop of 37.46% (October 13, 2022).
BEAR MARKET BOTTOM: October 13, 2022. The Index fell to 10,484.68 by October 13, 2022, marking a total decline of 37.46% from its recent top of 16,765.87 (November 21, 2021).
INDEX HAS RISEN MORE THAN 20% FROM RECENT BOTTOM TO ENTER A NEW BULL MARKET (5 Months): March 16, 2023. The index currently trades around 15,950, which is up by around 52% since the October 2022 bottom. If a full recovery followed to its recent all-time high, this could be an upside of additional 5%. However, it could also decline further.
- MOST RECENT RECOVERY FOLLOWING A BEAR MARKET (USA100):
2020 (COVID PANDEMIC DECLINE): After the pandemic decline of 32%, testing the rate of 6,615.50 (March 22, 2020), the index had risen around 153% to its most recent all time high of 16,765.87 (November 21, 2021).
2007- 2008 (GLOBAL FINANCIAL CRISIS): After a decline of around 55%, testing the rate of 1,017.80 (November 16, 2008), the index trended up in a strong bull run to add around 860% until the Covid Pandemic Crisis (February 16, 2020 to reach the level of 9,762).
However, please note that past performance does not guarantee future results.
- NEXT EVENTS
US Q2 EARNINGS SEASON START (JULY 14): Tech giants such as Apple, Alphabet, Microsoft, Tesla, Amazon will all report Q2 earnings in late July and early August.
US FEDERAL RESERVE INTEREST RATE DECISION (JULY 26 AT 19:00 GMT+1): THE US FED IS EXPECTED TO RAISE THE BENCHMARK INTEREST RATE TO 5.50% FROM CURRENT 5.25%. However, the markets have recently increased expectations that after the July meeting the US Fed may no longer raise interest rates.
USA100, July 19, 2023
Current Price: 15,950
|
USA100 |
Weekly |
|
Trend direction |
|
|
18,000 |
|
|
17,400 |
|
|
16,700 |
|
|
15,200 |
|
|
14,850 |
|
|
14,500 |
Example of calculation based on weekly trend direction for 1 Lot1
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USA100 |
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Pivot Points |
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Profit or loss in $ |
20,500 |
14,500 |
7,500 |
-7,500 |
-11,000 |
-14,500 |
|
Profit or loss in €2 |
18,262 |
12,917 |
6,681 |
-6,681 |
-9,799 |
-12,917 |
|
Profit or loss in £2 |
15,856 |
11,215 |
5,801 |
-5,801 |
-8,508 |
-11,215 |
|
Profit or loss in C$2 |
27,016 |
19,109 |
9,884 |
-9,884 |
-14,497 |
-19,109 |
1. 1.00 lot is equivalent of 10 units
2. Calculations for exchange rate used as of 11:10 (GMT+1) 19/07/2023
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