With a likely unchanged Fed policy on-tap, continuing fear of the Coronavirus, slightly disappointing earnings for the 'most important companies', and simply, a voraciously overbought market, a correction was inevitable and its happening before our eyes.
While there remains considerable uncertainty with the virus and earnings, what we can say is Apple and Microsoft must report impeccable earnings otherwise the Nasdaq could be under immense pressure. Moreover, the Coronavirus will continue to put pressure on the world markets (especially China) until there is confirmation on a containment which could takes weeks or several months.
One may reside to previous epidemics and say the correction is only temporary, however, one must also consider this market is exceptionally overbought which could result in temporary panic selling.
With US yields plummeting to the downside, this may indeed setup a sharper correction in the coming month of February which supports the technicals of Gold which wants to surge to 1700 in the next month or so. While equities may not correct all at once as the Fed may pump liquidity, it does appear the market may want to come down below 3100 sometime in February. For the near-term however, we can target an initial 3260 level which will likely be broken to the downside.
Initial Target: 3260 pivot
TP #2: 3190-3195
TP #3: 3150-3155
TP #4: 3002-3009
- zSplit
While there remains considerable uncertainty with the virus and earnings, what we can say is Apple and Microsoft must report impeccable earnings otherwise the Nasdaq could be under immense pressure. Moreover, the Coronavirus will continue to put pressure on the world markets (especially China) until there is confirmation on a containment which could takes weeks or several months.
One may reside to previous epidemics and say the correction is only temporary, however, one must also consider this market is exceptionally overbought which could result in temporary panic selling.
With US yields plummeting to the downside, this may indeed setup a sharper correction in the coming month of February which supports the technicals of Gold which wants to surge to 1700 in the next month or so. While equities may not correct all at once as the Fed may pump liquidity, it does appear the market may want to come down below 3100 sometime in February. For the near-term however, we can target an initial 3260 level which will likely be broken to the downside.
Initial Target: 3260 pivot
TP #2: 3190-3195
TP #3: 3150-3155
TP #4: 3002-3009
- zSplit
Note
A close at or above 3260 today (January 27th) would indicate a possible near-term end to the slight correction and possible pivot to bull. If a close above 3260 is present, further downside will be mitigated __UNLESS__ the WHO announces a global emergency and/or earnings this week DRASTICALLY disappoints. However, keep in mind the SPX will reach its highest longitudinal channel of around 4000 at some point so the OVERALL trend is still bullish.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.