Will S&P 500 Hit New Record Highs?

The S&P 500 is arguably the most important benchmark in the financial markets.  Over the last few months, we have seen some amazing trends that have confirmed a bullish end to 2016.  But now that a lot of the initial optimism in stock markets has fully run its course, investors will be looking for new ways of profiting on a dynamic market that has been defined by bullish sentiment and low interest rates.

For the S&P 500, this has meant new record highs at a fairly regular clip, as investors start to price in the possibility of renewed economic optimism under the administration of President Donald Trump.  When trading this type of event in the market, traders can use the SPDR S&P 500 ETF (NYSEARCA:SPY), which can be traded using the MT4 platform that is made available by easyMarkets.

Stock Market Trends

When looking to make the best investments in the S&P 500, it is essential to understand the cyclical nature of the ways that stock market trends unfold.  If, for example, we were to look at the Elliott Wave Theory, then many would suggest that the markets unfold in a series of wave structures that can be forecasted in advance.  

On the other hand, practitioners of fundamental analysis will need to look at factors like price-to-earnings ratios and industry competition in order to determine which stock investment strategy is best.  So there does not necessarily need to be a one-size-fits-all strategy when looking to gain stock investment exposure in assets that are tied to the S&P 500.  

The world-famous stock benchmark is currently trading at record highs and when we think about the fact that the Federal Reserve has left the economy at relatively low-interest rate levels there is still clear scope that we could see stock market rallies in the S&P 500 index.

S&P 500 Trading Systems

When we are looking at the potential trading systems that can be used to trade the S&P 500, it is important to consider possibilities like options and contrarian strategies that are able to take advantage of stalling momentum or even complete reversals in major benchmarks like the S&P 500.  This is not always something that is considered by traditional stock market investors, but this is an investment strategy that can be used to profit from investments in the other direction when stock markets are trading near their all-time highs.  

Stock Price Chart: GOOG

In other cases, it makes sense to look at other stock market benchmarks like the Dow Jones Industrials and the NASDAQ.  These instruments have their own characteristics when we are looking at the ways stock market investors can implement a stance on the economic outlook.  But now that we have seen some more evidence with respect to the ways the Federal Reserve will probably proceed with interest rate policy over the next two quarters, there are ways for investors to capitalize on these trends as they unfold.