News and analysis

The S&P 500 broad market index is signalling a potential path toward an extreme rally in the 6,900–7,000 range despite ongoing political uncertainty. A possible U.S. government shutdown on Wednesday could trigger volatility and add pressure to stocks, but from a technical perspective, opening a long position in the current 6,630–6,670 zone appears highly attractive. Prices are attempting to break through the midpoint of the upward channel, and a successful move would likely drive the benchmark closer to trend resistance.

The bullish case is further supported by institutional flows. The SPDR S&P 500 ETF Trust (SPY) reported record net inflows of $11.34 billion last week, reminiscent of the $19.3 billion surge in April that preceded an unstoppable rally. With strong demand from large investors reinforcing momentum, the setup favours further upside.

My target is 6,900–7,000 points, around 4% above current levels, with a stop-loss placed at 6,500 points to manage downside risk.

Robust demand for Bitcoin re-emerged over the weekend. The world's leading crypto asset simply used its most recent local lows at the top of the $108,000 big figure on September 26, as a new starting point to jump by more than $5,000 to $114,000+ area already this Monday. A moderate decline in Bitcoin prices to roughly the same values, then followed by a very short but effective period of fast recovery, is happening in the 20th of a month for the second time in a row, both in August and September. This could be related to some stabilization of planned institutional dip buying from large market-making banks. Liquidation waves possibly synchronized with the closing of banking monthly reports as well, with their crypto portfolio positioning being some later resumed from more comfortable levels after achieving monthly financial targets by institutional managers.

Thus, Bitcoin swings become less sharp. Bitcoin's technical support area between $105,000 and $110,000 is strengthening each time as well, with a clear tendency of transforming into a kind of fundamental factor. As a result, a potential slide below $100,000 is becoming much less likely, while further updating historical highs above $125,000 is becoming a matter of time as reputable funds and banks consider it their duty to accumulate large-sized positions. Many of them are trying to hold directional crypto investments via options contracts.

Just a few days ago, Deutsche Bank suggested a convergence between Bitcoin and Gold. Considering how quickly Gold is breaking new highs, this can only mean another uptrend projection for Bitcoin as well. Here we see how a major European bank has substantially joined the chorus of experts from the authentic crypto communities who have long been promoting the idea of Bitcoin as digital gold. Bitcoin follows in real Gold's footsteps, so that it may take a proper place in the reserves of central banks by 2030, the largest German bank's research group predicted, noting that Bitcoin’s 30-day volatility dropped to historic lows in August even as the price hit an all-time high and a decrease in the volatility of crypto currencies is natural as institutional adoption grows. Gold and Bitcoin "should be able to coexist on central bank balance sheets" while "emerging markets, with inflationary pressures, might benefit more from using Bitcoin as a reserve asset", according to the letter.

"History appears to be repeating itself. Like Bitcoin, gold was once subject to scepticism, suspicion, and demand speculation," Deutsche Bank claimed, adding that "we may be witnessing the start of a gradual decoupling between Bitcoin's spot prices and volatility as the crypto's integration into portfolios is maturing". They also mentioned that regulatory uncertainty in key markets like the U.S. and UK "crumbles amid a surge in adoption" among traditional investors and financial institutions.

Shiba Inu (SHIB) is trading flat this week at $0.00001181, underperforming the broader crypto market where Bitcoin (BTC) is up 1.1% to $112,127. Hopes are rising that a U.S. government shutdown could be avoided after Donald Trump agreed to meet congressional leaders on Monday, suggesting a possible bipartisan funding compromise ahead of Wednesday’s deadline. Such a deal would be supportive for crypto assets. SHIB has lost 19% over the past two weeks, testing both its uptrend line and horizontal support at $0.0000100. This level has historically provided strong footing, raising the chance of a swift rebound if political risks ease, with potential to advance toward the next resistance at $0.0000200.

Minor corrections in the major markets are mostly of the technical nature and certainly are wrong reasons for smart investors for retreating from mid-term bullish positions in the AI-based techs and other fundamentally strong mega cap equities. The prospect of further slashing U.S. interest rates is too serious an argument to ignore, while the leading role of artificial intelligence in increasing the growing payback of huge businesses is too high. A short-term repositioning in the form of a rather modest rollback of the broad S&P 500 indicator from its historical highs at nearly 6,700, accompanied by just several days of small-size profit-taking on a number of assets like Oracle or Broadcom that had outperformed the market right in September, is precisely what we warned about earlier.

This entire development is therefore not only quite logical, but also fits perfectly into our baseline scenario, which was projected long before last week's meeting of the Federal Reserve. This is our team's very practical conclusion. In purely theoretical discussion, the only wild card that could be obtained in the hand of bearish pessimists about the Wall Street sentiment is the Joker of a potentially impending economic slowdown, and therefore of consumer spending decline on both sides of the pond. This, of course, can be taken into account for a number of vulnerable businesses, since we recall that it was precisely the significant slowdown in the U.S. job numbers that triggered the restart of borrowing costs' reducing by the lagging, as always, central bankers from the Fed. However, that's our part to remember that even during all previous periods of crises, only small and some medium-sized businesses suffered from a decline in consumer spending, while huge businesses were never exposed to such obstacles for too long. Moreover, it was the behemoths of the transnational economy, especially in the IT sector and online sales that emerged as the main winners from all the hardships. That's why this potential Joker, even if it were on the hand, is not able to transform into some kind of Trump Ace to play against giants with trillions of market caps, especially as one of the Trumps (meaning U.S. president Donald Trump, of course) is clearly playing for the bull's optimistic camp as well. He is a master at creating a timely information environment for new market records. However, there are enough arguments like “money goes to money", even without Trump's rhetorical tricks.

In this context, fading of most US-China and US-EU barriers to self-consistent AI demand chains, where NVIDIA invests in OpenAI, OpenAI orders capacity from Oracle, Microsoft or Amazon, and then the latter companies again turns to the same original NVIDIA for chips etc, looks very stable. Thus, even some current technical corrective movements on "bought AI and Fed expectations - sold facts" in such special mega capitalized equities are merely greater dip-buying chances that should not be put off for long. At least, this is an important strategic principle of trading stocks for anyone who wants to have a happy Christmas, taking advantage of the upcoming wave of US indexes' and key global asset's price climbs on the back of the usually very strong third-quarter earnings season, which is about to start in mid-October. Investing in S&P 500 and Nasdaq futures, as well as buying the businesses that corrected most quickly in September like Amazon (-8.3% at the moment from the highest price of $238.85 on September 9 to nearly $218, seems like the simplest idea. The sales season, including Black Friday and Cyber Monday, will speak for itself. E-platforms offering the greatest savings, like Amazon and Walmart online, will benefit when people want to save more money. Given the growing contribution of Amazon Web Services (AWS), its monstrous cloud division, to total profits, we nominate Amazon as our top pick for the next couple of weeks compared to many other mega caps.