S&P 500 MEDIUM TERM SHORT - Fundamental and Technical

SPX

The S&P 500 composite index reached 2129.79 today, just a point away from its all time high at 2130.82.

This should provide a good place to short the S&P, because:


Fundamentally: the outlook for the US economy is strong, with good job growth - however, the Federal Reserve should now look to increase interest rates slowly, which should gradually weigh on the stock market.

Years of cheap borrowing will come to an end, with an inevitable crash in overvalued junk bonds.

Coupled with the risks of Brexit and low oil prices in the medium term, stocks remain overvalued.


Technically: SPX will face strong resistance at 2130.

It has been rejected from 2130 in July 2015 - exactly when the Federal Reserve was contemplating raising interest rates.


Below 2130-2135, SPX500 is bearish and may fall to 1800 in the medium term if the current economic climate persists.