The entire US economy is facing very normal cyclical pressures. Coming off a 10 year bull run from the last recession, combined with a rising interest rate environment and uncertain geopolitical environment, the US equity market is due a reversion. Prices have already violated technical lows that held through the last year and also established a firm double top.
Big firm's are likely unwinding large positions, mostly fueled by free or near free capital. The market is currently not in a state of panic and institutions continue to plead the case for more upside and a strong economy. The beauty of this pandering is to maintain an orderly market for a smooth exit.
Assuming this is the time for the cycle to shift to bearish, we can expect equities to retrace 30-50% of valuations based on historical movements. There should be a bounce coming off these oversold lows. A true deadcat bounce will move into our labeled entry zone. This is the area of prior support that held through all of last year.
Stop loss at the prior zone of resistance.
Big firm's are likely unwinding large positions, mostly fueled by free or near free capital. The market is currently not in a state of panic and institutions continue to plead the case for more upside and a strong economy. The beauty of this pandering is to maintain an orderly market for a smooth exit.
Assuming this is the time for the cycle to shift to bearish, we can expect equities to retrace 30-50% of valuations based on historical movements. There should be a bounce coming off these oversold lows. A true deadcat bounce will move into our labeled entry zone. This is the area of prior support that held through all of last year.
Stop loss at the prior zone of resistance.