We can see below that based on earnings expectations for Q1 2023, on the current 10Y rates and on the rates differential with corporate bonds, equities should be valued at $3680 or less (Pink arrow).
Coming back to the markets, we can see below that the NQ8 sector has issued a short signal, but
a buy signal would only be issued when the Active Boundaries indicator crosses above 110 and then below that level. We are not at that point yet.
The large section of the S&P500 still displays weakness which is due money leaving the largest caps for the more secure corporate bonds or even the Treasuries markets.
The market weighted average TEV indicator also displays a negative divergence, which indicates that funds are selling equities.
However, the NHNL indicator does not display capitulation, which would be found much lower.
Conclusions:
The equities markets have further to fall here and I would not buy a bounce unless capitulation is displayed on the NHNL indicator or on the OB/OS indicator of the 20DMF, which is still much too high here.
