"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."
Inflation expectations fell sharply last week, which generated a spectacular reversal of positions, especially for growth and tech stocks that were bought across the board.
The problem is that most other sectors have displayed selling:
This does not smell as a genuine new uptrend. It is probably an opportunity for funds to get out of equities and book tax losses before the next pullback.
We can see below that the 20DMF displayed a negative divergence yesterday and closed negative.
The Cumulative Ticks tells us that funds are not buying this market.
It is also interesting to compare the NHNL indicator to the situation during the July/August uptrend.
I believe that the 200MA could again be a formidable obstacle.
Finally, after the bounce from $3750 to $4000, even though the 10Y rates pulled back, the equities are still overvalued compared to corporate bonds.
Conclusions:
I still believe that this market has further to fall... But this could take some more days of side/up trend.
