As Trump's announced ‘release day’ on April 2 approaches, markets are becoming increasingly nervous, attempting to price in all anticipated risks.
So far, only one-tenth of the announced trade dispute measures have materialized into actual actions. The isolationist policies of the new White House administration could set back US and global economic growth by years, possibly even decades. Nearly a century of active international economic integration is now at risk. With negative consequences like rising prices, higher unemployment, and falling consumer sentiment mounting, there is hope that Trump’s actions will be reversed, leading to the removal or relaxation of protectionist measures.
Turning to the S&P 500 index, the new trading week opened with a bearish gap. Prices will likely test the recent local low around 5500 by Tuesday.
A favorable scenario would involve the announced tariffs being much softer and implemented gradually, which could quickly restore optimism in equity markets. Historically, the S&P 500 often forms a double-top pattern at the peak of a correction. From a technical perspective, we are now witnessing the formation of the second low in this reversal pattern. If the tariffs proceed as initially outlined, the S&P 500 could decline into the 5000–5300 range.
The overall recommendation is to buy SPX at the 5400 level.
Profits should be taken at the level of 5930. A Stop loss could be set at the level of 5100.
The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.
This content is for informational purposes only and is not intended to be investing advice.
