A tactical buy signal just flashed in the stock market, according to JPMorgan’s trading desk, indicating a potential 3% surge in the S&P 500 within the next 20 days. This bullish signal, similar to one seen in late August, has historically been successful in generating returns for investors.
JPMorgan’s Tactical Positioning Monitor, which measures positioning data in the stock market, has a track record of success with an annual return of 8.9% and a 69% win ratio per trade from 2015 to 2021. The buy signals have also shown a tendency to generate a 3% return over the following 20 days, triple the gain seen during other time periods.
The recent buy signal was triggered by a sharp decline in positioning data during this month’s market sell-off. However, JPMorgan’s trading desk emphasized that the success of the buy signal will depend on corporate earnings and geopolitical tensions.
While the buy signal is a positive sign for investors, JPMorgan cautioned that sustained market growth will require strong earnings performance and a reduction in geopolitical risks. Despite these challenges, the bank remains optimistic about the potential for a rebound in the stock market following the recent sell-off.
Overall, the tactical buy signal from JPMorgan’s trading desk has sparked optimism among investors, with the potential for a 3% surge in the S&P 500 within the next 20 days.
