The majority of stock market indices continue to consolidate within their dominant uptrends. At the same time, a growing number of technical divergences, rising complacency and weakening semiconductors suggest that downside risks are gradually increasing beneath the surface.
Beneath the US market's recent consolidation, leadership has shifted away from mega-cap technology towards a broader group of stocks. We assess whether this rotation supports another bull leg higher, or if it is the calm before a larger correction commences..
The Japanese stock index keeps hitting record highs but the risk of a correction is high and increasing...
What’s more in this report:
Can the S&P 500 reach 8000 in the months ahead? Kospi: A very significant ‘blow-off’ top seems to be coming (soon). What's next? US and German 10-year yield: The waiting game continues. Crude oil: WTI seems poised for an interim rebound rally, but we foresee a continuation of the larger degree bear trend thereafter.
The near-vertical price acceleration and exhaustion behavior signal major correction risk for (semiconductor) stocks. Although there are no bearish triggers yet, we would like to highlight Wall Street veteran Bob Farrell’s rule: 'Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways’ …
