Implications of A Looming End to Overbought Conditions #stockmarket #technicalanalysis

#StockMarket Commentary

Just one day after stocks narrowly avoided bearish conditions, a looming end to this extended overbought rally brought the stock market right back to the edge. Market breadth is at its lowest point since the overbought period began over a month ago. This tension means that the market may become less willing to ignore any and all bad news. Suddenly, some bad news will matter and become an excuse for a sell-off.

Earnings season kicked off last week, but I cannot even remember the last earnings season the directly catalyzed a significant market move. Larger issues like monetary policy have loomed so large. Interestingly, this earnings season, companies may be dropping more bad news ahead of time than usual. FactSet reported that a greater number of S&P 500 companies have issued guidance, and a higher share of this guidance has been negative:

“Overall, 111 S&P 500 companies have issued quarterly EPS guidance for the fourth quarter, which is above the 5-year average of 97 and above the 10-year average of 98.

Of these 111 companies, 72 have issued negative EPS guidance and 39 have issued positive EPS guidance. The number of companies issuing negative EPS guidance is above the 5-year average of 57 and above the 10-year average of 62. On the other hand, the number of companies issuing positive EPS guidance is below the 5-year average of 40, but above the 10-year average of 36.”

My competing themes for 2024 are the Cathie Wood Market versus the Be Ready So You Don’t Have to Get Ready Market. With a looming end to overbought conditions….be ready.

For more details see https://drduru.com/onetwentytwo/2024/01/13/implications-of-looming-end-to-overbought-conditions-the-market-breadth/

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Видео Implications of A Looming End to Overbought Conditions #stockmarket #technicalanalysis канала Ahan Analytics, LLC