empty
28.04.2025 07:00 PM
The Market Has Outplayed the Professionals

"Follow the smart money" — this classic principle of technical analysis suggests it's safer to side with professionals rather than the crowd. However, in 2025, such an approach would have led to capital losses. Hedge funds, traditionally seen as smart money, have sold $1 trillion more in U.S. equities than they have purchased since the beginning of the year. Retail investors, by contrast, largely stuck to a "buy and hold" strategy — and as April draws to a close, it's clear this approach has paid off.

After Donald Trump's election victory, the S&P 500 posted the strongest post-election rally in history, driven by hopes that the 47th U.S. president would turbocharge an already booming economy. In reality, Trump's aggressive tariff policies have raised fears of an economic slowdown. Bloomberg now forecasts U.S. GDP growth to decelerate from 2% to 1.4% in 2025 and has raised the probability of a recession within the next 12 months from 30% to 45%.

S&P 500 P/E Ratio Dynamics

This image is no longer relevant

An economic slowdown would weigh heavily on corporate earnings, making investors increasingly cautious about investing in the S&P 500. American equities remain relatively expensive, and capital is steadily flowing out of the U.S. and into Europe. According to Allianz, the $28 trillion U.S. equity market is too large to be abandoned overnight. Nevertheless, even minor selling pressure could trigger significant market corrections — as seen after Independence Day earlier this year.

Despite Trump's hopes that the S&P 500 rally would continue after the election, the reality of his inauguration and policy actions made the first 100 days of his presidency one of the worst periods for the index on record. Only during the crises of 1937, 1941, and 1973–1974 were there more severe declines — and in those cases, the market remained under pressure until the year's end.

S&P 500 Performance After Inauguration

This image is no longer relevant

By late April, the "crowd" had seized the initiative. The S&P 500 rebounded, coming within 3% of the levels seen on America's Liberation Day. Horizon Investments notes that sustained momentum will depend on positive developments in U.S. trade negotiations with other countries.

This image is no longer relevant

Markets are now closely watching upcoming releases, particularly U.S. GDP data for the first quarter and April's employment report, to assess the extent of the economic slowdown.

Technical Outlook:

The S&P 500 continues to form a 1-2-3 reversal pattern on the daily chart, signaling a potential exhaustion of the corrective phase. Long positions initiated around the 5400 level should be maintained, with profit targets and potential reversals considered around 5625 and 5695. Failure of the bulls to hold above 5500 would signal underlying weakness and could trigger renewed selling pressure.

Marek Petkovich,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/USD Overview – June 30: Nonfarm Payrolls, Powell, and Unemployment

The GBP/USD currency pair rose by 300 pips over the past week and appears to be in no hurry to stop. Even on Friday, the price failed to initiate

Paolo Greco 03:37 2025-06-30 UTC+2

EUR/USD Overview – June 30: European Inflation and Another Round of Lagarde Speeches

The EUR/USD currency pair has been rising for five consecutive months. During this time, we've only seen a few minor downward corrections, each ending in another collapse of the U.S

Paolo Greco 03:37 2025-06-30 UTC+2

U.S. Dollar – Weekly Preview

The American news background will once again play a key role for the dollar and, therefore, for the market and the vast majority of instruments. This past week, only

Chin Zhao 00:34 2025-06-30 UTC+2

British Pound – Weekly Preview

The situation for the British pound in the market and news landscape is quite similar. For the pound, two rate cuts by the Bank of England in 2025 or zero

Chin Zhao 00:34 2025-06-30 UTC+2

Euro Currency – Weekly Preview

In the upcoming week, the euro is expected to maintain demand in the market. Currently, all events are aligning in its favor. I previously wrote that only the wave structure

Chin Zhao 00:33 2025-06-30 UTC+2

EUR/USD – Weekly Preview: ISM Indexes, Nonfarm Payrolls, Eurozone Inflation, and "One Big Beautiful Bill"

The upcoming week promises to be both interesting and informative while also being volatile. The economic calendar is packed with major releases that could trigger heightened volatility in the EUR/USD

Irina Manzenko 00:33 2025-06-30 UTC+2

The Yen Has Lost Its Bullish Momentum

The Consumer Price Index (CPI) in the Tokyo region declined in June from 3.4% to 3.1% year-over-year, marking the first signal so far that may indicate a slowdown in price

Kuvat Raharjo 12:21 2025-06-27 UTC+2

EUR/JPY. Analysis and Forecast

The EUR/JPY pair is regaining positive momentum during today's trading session, reversing its recent decline.The euro continues to benefit from the prevailing sentiment of selling the U.S. dollar

Irina Yanina 12:17 2025-06-27 UTC+2

Inflation in Canada Remains Too High – USD/CAD May Accelerate Its Decline

Inflation in Canada remains too high to expect a rate cut by the Bank of Canada at its upcoming meeting. In April, inflation sharply slowed to 1.7% y/y, and most

Kuvat Raharjo 11:16 2025-06-27 UTC+2

XAU/USD. Analysis and Forecast

Gold is drawing renewed selling interest today after breaking below the key $3300 level. Traders are awaiting the release of the U.S. Personal Consumption Expenditures (PCE) Price Index, which

Irina Yanina 10:47 2025-06-27 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.