This is Why I think Equities are about to have a Meaningful Sell-off

I think that over the next week or so, equities will have a meaningful selloff. Here is why:

  1. Extreme Bullish Sentiment

  2. Weak action in equities

  3. Appreciation of oil prices

  4. Political turmoil

  5. Markets due for profit-taking

AMZN – Excessive Bullish Sentiment / overbought and testing uptrend

SPYs testing uptrend and the highs from September and October

The financials are the most overbought that they have been since January 2018. A 10% decline happened just afterwards.

Significant resistance just overhead in small caps

MSFT gapped up on an earnings beat. It is starting to refill the gap

GOOG missed revenue estimates…action had been very weak

Weak action in AAPL – despite beating estimates AAPL closed near its lows today 

Oil is +45% since December. There is resistance around the $65 level. The uptrend is being tested.

Political Turmoil

  • Trump vs Powell. POTUS suggests 100 basis point cut. To put this into perspective the emergency cut after 9/11 was ‘only’ 50 basis points

  • Mueller report Blah, Blah, Blah…

  • Venezuela / possible US military intervention