The USMAI is currently maintaining its uptrend

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USMAI Weekly Trend Update and Outlook

Current Status:

• Sustained Buying Pressure: This week, the USMAI continued to demonstrate sideways movement as part of the consolidation phase, but unlike previous expectations, the buying pressure has remained strong, keeping the index at higher levels and closing near the high.

• Delayed Correction: The anticipated correction phase has not yet materialized, as the strong buying interest has continued to support the market. The expected transition to a downtrend has been delayed, likely extending the current upward momentum.

Outlook and Key Drivers

1. Extended Uptrend:

   • Short-Term Continuation of Uptrend: The current trend is expected to extend for another two weeks, maintaining the upward trajectory as the market works through supply and resistance levels. However, the strength of the buying suggests that the correction is likely to occur later than initially forecasted.

2. Delayed Correction Phase:

   • Correction Timing Shifted: Given the sustained buying support seen over the past two weeks, the correction phase is now expected to begin around early November rather than late October. The ongoing price consolidation suggests that while a correction is still likely, it has been postponed due to the persistent bullish sentiment.

3. Short-Term Risk of Immediate Correction:

   • Possibility of Sudden Correction: Despite the extended upward trend, the market remains in a pre-correction phase. Any sudden weakening of buying strength or increased selling pressure could trigger an immediate shift into the correction phase, particularly if the market faces external risks or fails to make significant gains.

4. November Correction and Recovery:

   • November Correction: The anticipated correction will likely begin in early November, with the market expected to shift into a consolidation or downturn as buying pressure eases.

   • Recovery by Mid-to-Late November: Once the correction concludes, the market is projected to re-enter an uptrend around mid-to-late November, leading into a potential rally as the year-end approaches.

Strategic Considerations

1. Short-Term Gains with Caution:

   • Temporary Uptrend: Investors can continue to ride the current upward momentum for another 1-2 weeks but should be cautious of the upcoming correction. Given the potential for low volatility gains, taking partial profits as the market remains elevated may be a prudent approach.

2. Monitor for Correction Signals:

   • Signs of Weakening Buying Pressure: Watch for signs of weakening in the buying strength, such as slowing momentum or higher volume on down days. These indicators could signal the start of the correction phase.

3. Prepare for November Correction:

   • Adjust for Volatility: As the correction phase draws near, investors should consider defensive strategies or hedging against potential downside risk. The early November timeframe is key for re-evaluating market exposure.

4. Look for Re-entry by Late November:

   • Recovery Rally: As the correction phase ends in mid-to-late November, the market is expected to re-enter an upward trend. This period could present a good opportunity for re-entry or new long positions, especially if macro factors stabilize and support the bullish case.

Summary

The USMAI is currently maintaining its uptrend, but the market is entering a delicate phase as the anticipated correction is delayed by strong buying pressure. The correction is now likely to begin around early November, with the potential for a brief but notable downtrend before a rebound in mid-to-late November.

Investors should remain cautious during this period, watching for signs of weakening momentum and preparing for the upcoming correction. Defensive strategies and short-term gains are advisable until the correction phase concludes, after which the market is expected to present new opportunities for upward movement.