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· This trading range does not reveal any new information about the stock market's future. We will have to rely on what we concluded last week.

· Ideally, SPX, NDX, and DJI should have one or two more wiggles to complete the EW structure.

· Then, I expect a bigger correction to commence by mid-June or earlier.

It is still a good strategy to sell the rips (RIPs), i.e., raise cash, gradually, as we have been suggesting since December, especially since February-March. BTD is also a good play for short-term traders. However, BTD becomes more risky as the indexes approach expected targets. 🤑 

· My intermediate- and long-term views have not changed. They are bearish. 👇️ 

Market data as of close on 20 May 2024.

Let’s put the Magnificent 7 on a back burner and look at some long-term charts today. They reveal a significant overvaluation of the US stock market and the potential for a prolonged bear market. However, they do not intend to imply that the market will roll over tomorrow or that it will be a straight slide down. They suggest that the US stock market will make little progress or produce negative returns over multiple years.

10% of Largest Stocks = 75% of US Market Capitalization

· Only 3 times in the last 100 years, the 10% of the largest stocks represented about 75% of the total US stock market capitalization (see small red circles in the figure below);

· The first two instances correspond to the two most significant bear markets in the last 100 years, 1929 and 2000;

· The third instance is now – “Living Dangerously” in the stock market.

· Again, this is not a short-term (ST) timing signal. For that purpose, we use ST and MT cycles, EW T, and technical analysis on the daily and 1/4h charts, normally in the Premium Newsletter but sometimes also in the Free section.

· It is a red flag for the MT and LT market prospects

· The figure below shows the Hussman’s Indicator, which includes dozens of measures comprising valuations, internals, overextension syndromes, and numerous technical, fundamental, and cyclical gauges;

· Red and green clusters correspond to market peaks and market lows, respectively;

· The market is most overvalued in the last 50 years. According to Hussman, the market is most extended in the last 100 years except for the 1929 peak;

· Read more at: https://www.hussmanfunds.com/comment/mc240506/

· Again, these clusters are not immediate sell signals. Sometimes, the market peaks coincidentally with the indicators cluster peak, but sometimes, the market takes its sweet time and peaks months after the cluster peak. After the 2013 cluster peak, the market took more than a year to roll over.

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Let’s take another view of the NDX 4h chart Hurst analysis. . .

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