Markets don't go up in a straight line. Why can EXPECT A SHORT TERM CORRECTION in the markets

Views 439Apr 30, 2024

Our analyst Jessica Amir was interviewed by the Australian Associated Press) and she explains why you can EXPECT A SHORT TERM CORRECTION in markets, specifically why the $S&P 500 Index (.SPX.US)$ is at risk of a short-term pullback.

The reasons?

US Earnings experienced its biggest fall since 2020. While PEs are above average. Meaning, folks are paying above average for the S&P500, with negative earnings.
China's economy could be in strife. See my prior notes
The SPX technical indicators suggest a pullback may be looming (MAs, MACD).
The SPX 15-day SMA crossed under the 30-day. The last 6 times this occurred over the last 2 years, the S&P500 $S&P 500 Index (.SPX.US)$ fell 7% on average. See the chart below.
But why could the correction be short-lived? There is an increasing amount of capital being invested in the S&500 $S&P 500 Index(.SPX.US)$, as interest rates futures expect The Fed to cut rates in early 2024.
Most of the ETF flows over the last 12 months into the world's biggest ETF, iShares S&P500 ETF $iShares Core S&P 500 ETF(IVV.US)$, have taken place over the last 4 weeks. This tells you most investors are bullish. Yep, that's right. 60% of the money that's flowed into $iShares Core S&P 500 ETF (IVV.US)$ over the last 1 year, flowed into the ETF over the last 4 weeks. WOW!

$Invesco QQQ Trust(QQQ.US)$

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