Today’s Market Analysis
(About StockTargetAdvisor.com (STA Research) is a Canadian investment research company specializing in advanced stock research and analysis. Our research team comprises of Financial Professionals)
Today’s current broad market weakness is becoming increasingly significant as investors are now confronting a question that was largely ignored during the recent market all-time highs, has the market reached its peak moment for this current stock market cycle? Market indexes are experiencing selling pressure, and a weakness in sentiment, extending beyond the technology sector, with the market beginning to show characteristics that are seen with at the start of a technical correction. The fundamental backdrop at the moment remains supported by positive corporate earnings expectations and generally positive analyst consensus outlook, however the technical structure has begun to deteriorate, and now shows the possibility of a delayed double-top formation emerging across the multiple market indexes.
The current market outlook has become increasingly uncertain as trader and investor sentiment has dimmed while new macro-economic concerns emerge even though consensus analyst projections still continue point to the market continuing its bullish phase. Fundamentally, analysts continue to expect earnings growth to support stocks, but the technical signal is weakening and diverging from the fundamentals.
The S&P 500 is showing signs of a delayed double-top formation, with the 7,800–7,820 area acting as major resistance after the market’s recent record highs, in which traders are examining for key pattern disruption. The current key support zone is 7,650–7,700, in which a breakout above this resistance would restore the bullish trend, while a significant break below support would strengthen the double-top pattern and increase the probability of a 5%–10% correction al least, while some traders and technical analysts are forecasting that we are at the prescipice of a 80% market crash, based on long term trendlines, as the bond market, and weakening macros are spelling the alarm for a bear market.
The current market setup is a short-term bearish move, but intermediate-term direction is yet to be confimed, but bearish projections and weakening trader and investor sentiment are supplying the emarket with some major warning signs. The market has not yet confirmed, but could be in the process of confirming a major market top, but the weakening momentum, pressure on technology stocks, and the elevated bond yields alongside higher energy prices are increasing the risk that the recent highs could eventully prove that the market top is already booked in, and we are at the peak of the current bullish market cycle.
STA Research (StockTargetAdvisor.com) is a independent Investment Research company that specializes in stock forecasting and analysis with integrated AI, based on our platform stocktargetadvisor.com, EST 2007.