Market has been trading in a range from early March of this year and having hard time to breakout or breakdown. Earnings season is not providing any convincing push higher while geo-political issues are keeping a lid on this market. What is most probable scenario in near term? BPNYA remains below 70 and trending downwards for now. Volatility ($VIX) has managed to remain low which in turn has allowed this market to stay near HIGH, however this picture can change very swiftly in NO TIME. Market is near recent HIGHs as can be seen from below daily NYSE chart. Weekly chart continues to display divergence between Price and RSI, MACD and it is ONLY matter of time that this will resolve into a meaningful correction. NYUD is still well above EMA(21) but can you see that slight divergence on RSI. This would suggest that although BULL trend remains intact we might see a correction of 10-20% magnitude in near term. Summer months are considered bad for the market as you might have heard "Sell in MAY and Go Away". We might get to witness this in coming weeks/months. Expect lot of choppiness and wide swings as geo-political issues will also weigh on this market. However, market may attempt to make a marginal HIGH before starting the correction.
What does it mean for our Investments?
Bulls get benefit of doubt but remain cautious... Comments are closed.
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