Since the AAA corporate bonds yield is at 5.24%,
and since the expected S&P500 earnings yield for end of the Year is lower than the AAA bonds yield, it makes sense that funds start moving money out of equities to buy less risky corporate bonds that offer higher yields.
The downside target is now $3600, but as a matter of fact the horizontal green line should be well below the Red line to compensate for higher equities risks. Hence I believe that the markets will probably test the $3500 range next week.
The cumulative Ticks is still negative and so is the NHNL.
Conclusions:
There is no upside here. Even options expiration will not help the markets.
