US STOCK MARKET SIGNS OF WEAKNESS

US STOCK MARKET SHOWS SIGNS OF WEAKNESS

By Andrews Joseph

SEPTEMBER 17^TH 2021

1.US stock indices,S&P 500, Dow Industrial, Dow transportation and Nasadaq had consecutive fall for last 7 trading sessions, Despite Apple introduced new iPhone version the stock fell.

2. The famous Dow theory is showing sell signal in one of the US indices Dow Transportation.

3. Another major economic factor Seems to be a Disruption in supply chain in US.

4. Some of famous indicator such as Shiller pe ratio, buffet indicator and ray dalio indicator are not in favor of the U.S market.

5. The macro index model which shows the strength and weakness of the economy is showing weakness where it has started to drop on the downside at 0.4 and And it is the second lowest since 2009.

6. Another model called bear market probability model has started to  rise, this indicator is calculated on the basis of unemployment rate, manufacturing index and then inverted yield curve, interest rate, inflationary methods and valuations of the various companies and this is also indicating bear market in the coming months.

7. One more indicator called the spread between bear market probability and macro index model and these also showing the sign of weakness where we can see the spread is higher and about 20 %

8. The valuations are up at  high and it tells us the returns are going to be low in the coming months an annualised return - 17.6 percentage returns it is expensive and we’ve overpay for assets and the returns going to be low or negative last we saw the 20 % above was during the tech bubble and 2008 financial crisis

9. On the technical front all US major indices except S&P 500 are testing the 50 days moving average and we may not know whether it will test 200 day moving average.

10. The other famous indicator such Schiller's pe ratio, Buffett indicator and Ray dalio indicator or not in favour of US market

Next blog: will update the levels where it may go down and at what level it will recover.

Note: There are many other things which Can be specified her since the blog will become too long so have made ten points Blog.

We don’t know what is going to be the catalyst that may drag U S market in to short term correction or a bear market phase and some of the catalyst are Micro an macroeconomic factors such as due to inflation or deflation or  the new delta variant of coronavirus which is emerging in US or fed tapering or the rising unemployment.  we have to wait and see what may be catalyst.

Important note: We cannot time the market as when the topping process will happen and when we will enter into bear market phase it may happen within a year or two or within a month so the process may take time also.

US MARKET may drop 10% correction and will make one final bull run phase and then enter in to recession also

                           Quote for the day

“ It is during our darkest moments that we must focus to see the light"- Aristotle  Onassis

Thank you

“ Disclaimer: The above content is only training and educational purpose only. Views may differ from one person to other person. I don’t recommend anyone to trade based on the above information. Trading and investment involves huge risk. Please consult your financial advisor.”