Commentary: Paul Ebeling on Wall Street and Beyond

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“The stocks markets are climbing a wall of worry, aka Bullish” –Paul Ebeling

A hawkish Fed, high inflation, war and pestilence are among the reasons to doubt this US stock market’s V shapped rebound. My work suggest naysayers risk missing out on a run to a record high. 

The S&P 500 index negated a Bearish head and shoulders pattern by rallying past an early February high of 4,595 part of the right shoulder on the chart. This technical analysis suggests a target of 5,200+ is feasible, which would Top the early January record close of just over 4,796. My call is 5,500 S&P 500 yr end.

April is 1 of the best months for generating returns, the track record for April has been astonishingly strong. Since Y 1950, it has been the best month for stocks on average.

More recently, the S&P 500 has been green in April in 15 of the past 16 yrs, with an average return of 3.1%; the high was a 12.7% return in April 2020, and the low was a -0.7% dip in April 2012.

The exception to this trend has been that in midterm election yrs, April has ranked the 7th best month for the S&P 500 with an only slightly positive return, I am not concerned. As I believe that seasonal strength wins out against this yr’s geopolitical and economic backdrop.

On the Crypto Front

Survey: 15% of respondents in the US and 16% in the EU say cryptocurrencies guard against inflation, plus in regions plagued with long term hyperinflation such as Latin America and Africa, almost 60% of respondents said “crypto is the future of money,” while 46% in those same regions said “certain cryptocurrencies are a great way to protect against inflation.” And those living in countries with local currencies that have declined 50% or more in value Vs USD over the past decade such as South Africa, Mexico, India and Brazil were 5X more likely to say they planned to purchase cryptocurrency in the coming yr, according to the survey released Monday from the cryptocurrency exchange Gemini.

Our conclusions were, if a country has a stable currency, crypto can be seen almost as a nice to have,” Gemini’s COO said, “versus where you’ve got an unstable currency, it’s almost a need to have.”

The study, conducted between late November to February, surveyed 29,293 adults in 20 different countries across the world who earn an annual household income of at least $14,000.

Have a prosperous week, Keep the Faith!

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