Arguing against a new bull run and in favor of a bear market rally

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Last Updated on August 18, 2022 by Bitfinsider

The Nasdaq Composite (IXIC) had its worst day in almost three weeks on Wednesday after an almost 25% rise off the June lows.

While it’s still too early to call it quits on this two-month rise, a growing number of Wall Street experts are warning that equities have advanced too far, too quickly, and are due for a correction.

Even worse, several seasoned money managers predict a test of the 2022 lows with substantial downside consequences should they be broken, which might translate into a 25% decline from present price levels.

Fairlead Strategies’ founder, Katie Stockton, recently become a member of Yahoo Finance Live to provide some longer-term context for the current bullish moves. Both the rally’s pace and its breadth, or the number of equities joining to the upside, have Stockton impressed.

Stockton would like to see more of the same if this is the start of a new bull market.

One hopeful sign, according to Stockton, would be “if we started to see a number of breakouts across the board that seem to have some staying power.”

Longer-term charts point to further downside, despite Stockton’s admission that we are unsure if this is a rally typical of a bad market or a bullish reversal.

The S&P 500 kissed its 200-day moving average on Tuesday, a crucial technical mark from which it immediately plummeted. Stockton points out that in contrast to what you want to see in a long-term bull market, the slope of that average is trending lower.

The S&P 500 level of 3,815 is being observed by Stockton as a potential retest zone that market analysts are talking about. However, if these lows are forcefully broken, which would indicate that equities stay below this level for a few weeks, we may easily witness considerably lower prices.

At 3,200, the S&P 500 would fall 34% below its all-time high and 25% below Wednesday’s closing price.

Meanwhile, Goldman Sachs strategists recently detailed seven factors, including anticipated institutional money flows and retail investor FOMO, that will help stocks profit from money flows until the end of the month. However, as we approach this Friday’s monthly options expiry and try to survive the notoriously volatile month of August, equity investors must contend with a number of challenges.


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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.


Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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