The Charts Predicted the Market Sell-Off!While many are attributing the recent sell-off in stock markets to fears of a recession following last week's weak economic data, I believe the bearish trend was already unfolding in the US stock markets.
On July 22, 2024, I wrote:
"Following Biden’s withdrawal from the US presidential election, a recovery in the US stock markets is anticipated. However, recent developments on equity charts are concerning. The Nasdaq has experienced a significant failure at the top of a 9-month trend, with the rejection appearing directional. Additionally, the weekly S&P chart shows a bearish engulfing pattern, indicating potential losses back to at least the 5350 mark of the 2024 uptrend, with the possibility of a deeper sell-off."
Given the capitulation of other stock markets and the rapid sell-off in the S&P, which easily broke the 2023-2024 uptrend, we now expect the market to decline further and mean-revert to the 55-week moving average at 4887 and the 4818 peak of 2022. This suggests at least another 5-6% sell-off.
Sorry guys but the charts called it!
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