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US Equity markets should be nearing an area of support, and Treasury yields and more meaningful rallies might begin for both Equity indices and Treasuries starting next week, potentially coinciding with weaker economic data and/or more evidence of FOMC pausing their rate hikes.  Movement down to SPX-4165-4200 looks important based on a number of different metrics, and might provide some stability into next week. 

Overall, US Equity markets look close to bottoming given the following reasons:

  • Bearish sentiment has arrived via Fear and Greed, AAII, Investors Intelligence & elevated VIX
  • Bullish seasonality in Pre-election years suggests October normally works well following a sub-par August and September.
  • Elliott-wave analysis argues that this might be the final pullback from early September as well as from late July 2023.
  • Market breadth readings have reached levels that historically have coincided with market bottoms.
  • Structural support is getting closer, and SPX should find strong support at 4165-4200 over the next week.  200-day moving average along with uptrend line are just below current levels
Technology has held up better than expected, not just on a cap-weighted bas...

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