In today’s briefing:
- U.S. Indexes Form Bear Flag Patterns Within Downtrends; Opportunities Within Health Care
- Euro Macro Bear Target and Risk Message
U.S. Indexes Form Bear Flag Patterns Within Downtrends; Opportunities Within Health Care
- We continue to view the price action over the past month as a bear market bounce in the S&P 500, Nasdaq 100 (QQQ), and Russell 2000 (IWM).
- Each index appears to be forming a bearish flag pattern. Until the S&P 500, QQQ, and IWM can break above their YTD downtrends, we remain bearish.
- We continue to believe that this bear market is being fueled by the rising U.S. dollar (DXY), rising 10-yr Treasury yield, and the move higher in WTI crude oil.
Euro Macro Bear Target and Risk Message
- The Euro’s high momentum decline post 1.07 break of key support opens the wave for macro weakness after a tactical bounce we see further downside risk to 0.96 and 0.88.
- Bear triangulation and the impulse lower shore up the USD’s bull posture in Asia and EM.
- Buy USD weakness remains our mantra toward DXY 118 and will have a major impact on risk assets into September and then again in Q1 2023.
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