We believe there are strong signals that support a bearish approach regarding the performance of that Index: 1) Megaphone pattern in face of a fight between bulls and bears. Bears are currently in charge. 2) 200MA and trend line rejection 3) Bad economic outlook: We are experiencing a contraction in companies results in face of recession fears. 4) Strong hawkish approach from FED regarding monetary policy.
The chart speaks to us, therefore we have to accommodate our investment strategy to current conditions. The breadth indicators were showing a possible end of bear market during july-august rally. However a rejection of 200MA and a false downtrend breakout after Powell's speech increase the risk of more drawdowns.
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