The US stock market trend in the past has left many parties a bit uneasy. S&P 500indexAt the beginning of the 11th, it rose sharply, reaching a new high in three months, but it closed in the dark, indicating that “peak inflation” has subsided. Although it rose again in early trading on 12th,investPeople still seem suspicious about the recent rally in US stocks.
Financial website MarketWatch reported that Swissquote Bank analyst Ipek Ozkardeyskaya said: “A ripplebear marketThe rebound, and a prolonged recovery, apparently began very evenly. Before we can say that this year’s bear market is over, we need to see a consolidation. ,
He described the US stock market rally as a “Tom Jones rally”, using the famous song from the smash hit British singer: “It’s not unusual.”
In particular, the U.S. The stock market — particularly the Nasdaq Composite — has rallied from its trough in mid-June, nothing special.
According to a research report released by Bespoke Investment Group, based on the general definition of bull and bear markets, with a rise or fall of 20%, the Nasdaq Composite Index closed its previous low on Wednesday, November 20, ending November 19. Happened. 2021. But “the most amazing thing is that the bear market that just ended was just that”. Bespoke reported that the Nasdaq fell by a total of 33.7% over 209 calendar days, from a “peak” on November 19, 2021 to “trough” on June 16, 2022; In contrast, since 1970, the Nasdaq bear market lasted 201 calendar days with an average decline of 35.5%.
That being said, on the technical side, there could be warning signs in the near term. According to data from CMC Markets, the 14-day relative strength index (RSI) of the S&P 500 Index futures was slightly above 75 in early trading on 12th, indicating that the broader market has entered “overbought” territory.
At the same time, Nicolas Kolas, co-founder of Datatrack Research, noted that the recent fear index “VIX” fell to 20, which is its long-term average, which usually means that market conditions have calmed down, but the correlation between Shares haven’t fallen as expected. High correlations between sectors such as big tech, communications services, consumer discretionary, financial and healthcare are often indicative of market tensions.
“The VIX closed today at 20,” said Kolas, promising that the stock market has yet to deliver, which is a decoupling of the area’s price action from the broader market. He said that this year, investors have been advised to buy when the VIX rises to around 36. Buying the stock, and reducing their holding when the VIX nears 20, “it’s now the latter position, although we are still bullish, the stock now looks a bit overbought.”