: At current levels, the S&P 500 (SPX) sits just above strong technical support in the 3220-3310 range. The Nasdaq 100 (NDX), where positioning had become overcrowded, is currently resting on short-term technical support in the 11000-11320 range with more significant support at ~9750-10,300.
As discussed yesterday, markets don’t usually make a top on accelerating price momentum and elevated bearish sentiment. And last Wednesday’s record high close in the S&P 500 occurred with accelerating price momentum, no apparent internal divergences and elevated bearish sentiment.
We continue to view the recent pullback in the SPX as a pause rather than the beginning of an immediate, deep correction. Market tops aren’t usually made on accelerating price momentum, broad sector participation and still-elevated bearish sentiment.
The S&P 500 is currently down ~6.2% from last Wednesday’s record close and trading below initial technical support at ~3410. More significant support sits in the 3210-3280 pattern break out range. At ~11,008, the Nasdaq Composite (CCMP) is now resting just above technical support at
Thus far, the current sell-off in software stocks looks like episodes from the past two years (2018 and 2019), which also happened to occur in August/September. This current episode is likely to look similar to the past two, rather than a full-fledged correction where multiples
Today’s sell-off in Tech looks like the begging of a ‘healthy short-term correction’ amid crowded positioning and record-high multiples. The decline in growth and momentum sectors started quickly and will probably end quickly without broad sector rotation. I think you need to see higher bond
The market will face a couple of potential downside catalysts over the next ~2 months. The first catalyst is the September 16 FOMC meeting, where participants will look to see if the Fed supports its new policy framework with more stimulus. The second obvious catalyst
The market will face a couple of potential downside catalysts over the next ~2 months. The first catalyst is the September 16 FOMC meeting, where participants will look to see if the Fed supports its new policy framework with more stimulus. The second obvious catalyst
The market will face a couple of potential downside catalysts over the next ~2 months. The first catalyst is the September 16 FOMC meeting, where participants will look to see if the Fed supports its new policy framework with more stimulus. The second obvious catalyst
Rising bond yields have the potential to create problems for momentum sectors like Tech where positioning has become crowded. Tech has an historical negative correlation with interest rates.
