Major Downtrend Resuming | Jeffrey Huge, CMT (04.05)
Your Daily Five • 20m
A Tale of Two Sectors - Tech led the 1Q23 rally but it was AAPL, MSFT, and NVDA that dominated to gains. Financials collapsed but the market cap of AAPL and MSFT equate to that of the entire Financial sector, thus offsetting the impact.
A Bear Market in Small Banks - The banking crisis that kicked-off in March is just the beginning of a pronounced downturn in the banking industry as fundamentals erode and threaten to spill-over into the broad economy.
A Bear Market in Large Banks - Most investors believe that the banking crisis is contained to the small regional banks, but it's not. The SIBs are also exposed to the same endemic problems that have become most pronounced in the small regional banks. One way or another, a bear market will always call your bluff!
A Continuation Pattern - The lateral consolidation in the S&P 500 has traced out a 5-point reversal pattern also known in the vernacular of technical analysis as a "Symmetrical Triangle." Triangles are "continuation" patterns. As such they have a very high probability of resolving in the direction of the preceding trend. That preceding trend was decidedly down.
Short-Term Elliott Wave Model - If our preferred count is correct, then the S&P 500 is now on the precipice of a thirdwave decline at three degrees of trend. We expect prices to plunge to new lows in the days/ weeks immediately ahead.
Connect With Jeffrey
LinkedIn: Jeffrey W. Huge, CMT
E-mail: [email protected]
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