The Stock Market Could Be Nearing a Short-Term Peak, Analysts Say
Short-term stock market indicators are peaking and turning negative with downside lasting well into October, Fundstrat analysts said in a note Tuesday, Sept. 26.
Near-term indicators that track two- to four-week shifts are currently "overbought and turning negative as equity markets rally to resistance," analysts wrote. Since sector rotation during that small time frame has been a "defining characteristic" of markets throughout the spring and summer, it could be time for investors not typically focused on trading to shift gears.
At the same time, the recent stock market rally has left few names "timely" buys under current conditions. And the selling will continue: a pullback over the coming weeks is poised to be significant given the internal correction that's been happening in the equity market throughout most of the summer, analysts noted.
While the stock market readies for some downside, U.S. 10-year Treasury bond yields have "rebounded back to their 2017 downtrend," analysts added, showing initial signs of stalling or peaking.
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