FX168 Financial News (North America) — According to a report from J.P. Morgan's trading department on Tuesday (April 23), the stock market has just flashed a tactical buying signal.

The buy signal indicates that the S&P 500 could rise 3% over the next 20 days, which will take the index just one step away from its all-time high. #2024投资策略 #

J.P. Morgan's tactical position monitor measures position data within the stock market. It sends a buy signal when short-term positions drop sharply and rapidly, or when positions rise and the stock market remains below recent peaks.

J.P. Morgan's tactical buy signals have a good track record. From 2015 to 2021, the strategy generated an annual return of 8.9%, with a win rate of 69% per transaction. Furthermore, according to the bank, buy signals tend to yield a 3% return over the next 20 days, which is three times that of 1% in all other time periods.

The most recent buying signal was issued after the position data showed a sharp drop in position data when the large-cap stock market fell 5% this month.

J.P. Morgan said, “Our US tactical positioning monitoring has just reached an attractive set threshold for the S&P 500 because it fell to -1.5z in the past 4 weeks.” “The last time we reached this level was in late October '23, although the current setup seems more similar to the situation near the low in late August '23, which also triggered an attractive setup at the time.”

(Source: Business Insider)

However, J.P. Morgan's trading department acknowledged that the bullish buying signal alone was not enough to push the stock market higher.

On the contrary, for the latest buying signals to succeed, the company must be profitable in the first quarter and geopolitical tensions must cool down.

“To make it quite obvious, whether we can sustain the rebound we saw earlier this week will likely depend on profits and lack of growth/geopolitical fears. However, after the recent sell-off and reduced positions, a rebound seems more likely if they hold on,” J.P. Morgan said.