We contrarians should realize that it’s just a bounce within firm downtrends. If the global bear persists, that’s what we call a short setup.Īs for bonds, let’s use the daily chart of some bond funds per a post on ‘inflation Wednesday’ as CPI made the inflationary headlines but bonds continued in bounce mode. It’s pretty clear that global stocks are also oversold with an initial bounce objective to 48+, then the 50 area (including the hard down sloping SMA 50) and finally the area where clear lateral resistance will soon be met by the down-sloping SMA 200. While there are so many different markets influenced by different macro factors, this summary article gives a general view. Let’s use the Global (ex-US) iShares (daily) for a condensed look at the world. SPX did after all bounce from a valid support area not visible on this chart and it also filled some nagging downside gaps that we’ve been watching for months (there are several more still lower, however). Of course, alternatives are that the bounce will fail imminently (market crashes can come amid oversold conditions and over-bearish sentiment) or that the drop below 3900 on Thursday was all she wrote in a mini bear market taking the form an A-B-C correction to the major bull market. The situation is bearish but in bounce mode.Ī shorting opportunity could well set up in the low-mid 4400s if the rally is strong enough. The ‘death cross’ of the moving averages already had its obligatory rally to mess with those taking the signal seriously in March. A real test for the bulls would come at the 50 day moving average (4330 and sloping down) and/or the SMA 200 (4478 and turning down). If Thursday was a short-term low we can look for initial bounce targets to 4150 and the 38% Fib retrace at 4225. But sentiment has provided a contrary situation for a more extended rally. While as of this writing the trading week is not over, if the market closes in rally mode (daily chart below) it’ll be due to short covering. The likelihood is that a bear market has begun, but in line with the terribly over-bearish sentiment (AAII, Investors Intelligence, Smart/Dumb indicators, NAAIM… you name it, it’s been over-bearish for some time now) it has come time for a bounce, bear market rally or yes, even the possibility that this bear is one and done. NFTRH had been noting important trend changes in the weekly charts of the main US indexes since the market’s bounce failure in March. * Reference this post done while sitting with a flight delay at JFK managing the breakout in the Gold/Silver ratio after Jerome Powell tanked the markets with his all too tardy jawbone ( as I harangued per this post from February) during my out-bound flight several days earlier. But it’s always handy to have a general summary view of macro markets. A general update of a macro in transitionĭetailed work, which got us to this point intact, if a little frustrated*, is done in NFTRH reports and updates.
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