American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Investing

5 reasons the S&P 500 and the SPY ETF could dive in 2025

by admin December 3, 2024
December 3, 2024
5 reasons the S&P 500 and the SPY ETF could dive in 2025

The SPDR S&P 500 ETF (SPY) stock continued rising and is sitting at a record high as the strength of the equities market accelerates. The fund was trading at $605 on Monday, bringing the year-to-date gains to about 27%.

Other related funds like the Vanguard S&P 500 (VOO) and the iShares S&P 500 (IVV) have also soared this year. 

Technical analysis points to a future SPY ETF reversal

The SPDR S&P 500 ETF has been in a spectacular rally for decades, which explains why it has become one of the most popular funds in Wall Street.

As a result, the fund has constantly remained above the 50-day and 200-day Exponential Moving Averages (EMA), meaning that bulls are in control.

However, historically, the ETF has seen periods of bear markets, as we experienced in 2022, when it crashed by over 20%. 

There is a risk that the fund will have a strong bearish breakout, possibly in 2025. That’s because, as shown below, the fund has been forming a rising wedge chart pattern, which is a popular bearish reversal sign.

This pattern is made up of two ascending trendlines that seem to be converging. The lower line connects all lower lows since August, while the upper one connects the higher highs.

In most periods, a rising wedge pattern results in a strong bearish breakdown, especially when the two lines near their confluence level.

There are other signs that the SPDR S&P 500 ETF will suffer a harsh reversal. For example, the MACD indicator has remained above the zero line but it is moving sideways, a sign of a bearish divergence.

The Relative Strength Index (RSI) indicator has also moved sideways below the overbought level. Also, the stock was trading at the strong pivot release of the Murrey Math Lines indicator.

Therefore, there is a likelihood that the S&P 500 index will suffer a harsh reversal, probably in 2025. If this happens, it will likely drop to the bottom of the trading range at $545.

On the flip side, a move above the key resistance level at $640 will point to more gains, possibly to the extreme overshoot level of $656.

Catalysts for an S&P 500 index reversal 

There are a few potential catalysts for a bearish reversal of the SPDR S&P 500 ETF.

First, Donald Trump has vowed to be tough on trade and has already threatened to impose tariffs on imports to the United States from its key trading partners like China, Mexico, and Canada. If he goes ahead with these plans, there are rising odds that he will trigger a trade war that will impact most companies in the S&P 500 index like NVIDIA and Walmart.

Second, Trump has also vowed to be tough in China, the second biggest economy in the world. He could do that by imposing tariffs and trade restrictions as he did in the last term. These actions could hurt more American companies that do a lot of business in the country.

Third, there are concerns about the valuation of American companies, which could trigger a reset. The forward one-year PE ratio for the S&P 500 index is 22, higher than the five-year moving average of 19 and higher than the ten-year average of 18.

Additionally, the fiscal state of the US economy is major risk as public debt has now surged to over $36 trillion. Analysts expect that the figure will be over $40 trillion in the next few years. Worse, Trump has vowed to cut more taxes, a move that will lead to more deficits over time.

To be clear: a drop in the SPY ETF stock will be brief as it has done in the past decades. Historically, the index drops and then bounces back. We saw that during the COVID-19 years, the Global Financial Crisis, and the dot com bubble.

The post 5 reasons the S&P 500 and the SPY ETF could dive in 2025 appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Here’s why the Nio stock price HK could rebound soon
next post
Dollar Tree stock price analysis ahead of earnings: buy or sell?

Related Posts

Top crypto price predictions: Grass, Uniswap, Virtuals Protocol

June 22, 2025

IAMGOLD and Sumitomo’s Côté Gold Mine Reaches Commercial...

August 8, 2024

Will Dow Jones index 2024 losers become 2025...

January 2, 2025

ChemX – Investor Presentation

May 9, 2024

Lemonade stock price is rising: technicals point to...

November 20, 2024

I’d avoid Blackrock’s IBIT ETF and buy this...

February 17, 2025

WOA Proprietary Technology Successfully Adapted to Produce Pea...

July 9, 2024

5 Top Weekly TSXV Stocks: Spruce Ridge Resources...

February 27, 2024

Lo Herma ISR Uranium Project, Resource Drilling Funded

July 3, 2024

5 Top Weekly TSXV Stocks: TAG Oil Surges...

February 20, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • GMS stock jumps 29% on takeover interest from Home Depot, QXO, analysts raise PTs

      June 22, 2025
    • Japan’s rice price surge: what’s driving it and why it could spark a political crisis

      June 22, 2025
    • BofA raises STOXX 600 target amid resilient global growth, warns on Mideast risks

      June 22, 2025
    • Palantir co-founder: US must prevent Iranian nukes

      June 22, 2025
    • Fed governor Waller advocates for July rate cut amid tariff, labor market outlook

      June 21, 2025

    Categories

    • Business (3,209)
    • Investing (2,537)
    • Latest News (2,000)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved