$S&P 500(.SPX)$ thoughts: I think the market gains from the beginning of the year, along with a portion from last year will be erased in the next corrective move.
To add some probability to this thought I am watching for a concluding momentum interruption. In the lower panel is the PPO (Percentage Price Oscillator) used to measure trend momentum. In my analysis momentum interruptions occur when the initial negative crossover (red dots in the lower panel) is not followed by a corrective move, instead price continues to advance with multiple interruptions before a decline materializes.
I speculate that the final interruption cycle will follow a path similar to those observed in the past. Two previous instances of interruption cycles are highlighted where the advance made during such periods was erased by the correction that followed.
A comparable outcome today brings the S&P 500 back to 4550, an 8% decline from Friday's close. This thought aligns with the S&P 500's historical seasonality over the last 20 years where most of the advance is returned by the end of February. Before the permabear labels show up in the comments, note that I am an advocate that this will be a healthy correction that consolidates the record three month advance.
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