Good morning,
There’s a lot I could opine on in this week’s intro, whether it be breadth, or the absolute slew of market moving events upcoming this week.
Today’s report will cover all of that but I’ll start here by answering what is likely most investors’ most pressing question:
Yes, I believe the odds favor more downside for the S&P 500.
Two main reasons why.
First, the bulls missed their opportunity last week. Not only did we fail to get a “buy everything” day but we saw more stocks making new lows on Friday. That negates the thesis that this latest leg down was the “whimper” in a bang and whimper correction.
Second, if we’re trying to decipher whether this is a routine correction and sentiment reset or we’re dealing with something more systemic, the dollar argues for the latter.
Yes, yields are right there with it screaming higher, but while we can debate Fed policy and inflation data and what could right the ship with rates, there is little the Fed can do to stop the rise in the dollar.
Despite the cyclical carnage we’ve seen since December, the jobs report was another reminder that the US is the best house in a bad neighborhood and technically there are few signs that the dollar rise is over.
It was a primary risk laid out in the December Bear Case report, and unfortunately, that risk is coming to fruition.
This week’s report will review:
Friday’s negative reaction to the jobs report
Key breadth metrics
Major index technicals
Key stock charts for this week’s earnings reporters
and more!
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