To The Moon

I think with high probability that S&P 500 $S&P 500(.SPX)$  is going to head towards the 5000 USD support in near term. If you look at the attached graph for S&P, the index drop below EMA50 for the first time since Nov 2023, which might signify a potential incoming deep correction. 

As we can observe, the three major U.S. stock indexes $DJIA(.DJI)$  $Nasdaq100 Bear 3X ETF(SQQQ)$  $SPDR S&P 500 ETF Trust(SPY)$    fell significantly in April due to several reasons  including geopolitical tensions in the Middle East led to gains in crude oil and other commodities. Gold broke through $2,400, a new high, and then arbitrage fell back. Inflation concerns have shattered expectations for interest rate cuts. An interest rate cut in May is likely to be almost zero, and the chance of a rate cut in June will fall below 30%.

Higher yields weigh on stock prices for several reasons, chiefly because they make debt financing more expensive for the many companies who rely on debt offerings to operate, and they make investors more prone to keep their money in bonds, where there is a safer rate of return than in equities.

The recovery of the U.S. economy has brought short-term optimism, but beneath this optimistic veneer lies a deeper challenge: geopolitical tensions in the Middle East are escalating, with possible consequences for the global economy. The April slump coincides with diminished expectations the Federal Reserve will meaningfully trim interest rates in 2024, hopes that would bolster companies' earnings power and relative valuations but were dashed by a series of concerning inflation reports.

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