The Mother of All Corrections

Posted On :

The $ES (S&P 500 futures) and $NQ (Nasdaq 100 futures) simultaneously reached new support levels during the overnight session, from where it should stage a tepid bounce.  But this has been nothing but a case of a 'falling knife'.  Ignore what most pundits deem to be 'support' and an 'extreme' oversold condition;  The truth is the market is unwinding all the growth assumptions made since the mid-2019 lows, and until the S&P 500 ($SPX) completes its reversion move to its 'fair value' of ~2760, the knife is going to keep falling.  By then, the Nasdaq 100 ($NDX) should reach the 7600 area.  Only then will a sustainable relief rally aiming for the 3030 (or a bit higher) area of the $SPX would likely begin, but only to set the stage for the next leg down towards the December 2018 lows.

A handful of charts and short articles should offer insight into my thesis and thought process.

1. Overnight support levels in the $ES and $NQ
2. Last June's $SPX forecast:
3. Why the SPX's fair value is in the 2700's:
4. The $DJT's inability to break out to new highs and where it's heading:
5. The $RUT's inability to break out to new highs and where it's heading:
6. My base case for 2020 (recession and tick-up in unemployment):
7. Complacency:
8. The V-Shaped Recovery Bet: 
9. Gold's trajectory:



Previous Article A Looming Recession?
Next Article Short-Term Relief
1940 Rate this article:
No rating

Please login or register to post comments.