The current price action analysis of US100 suggests a potential recurrence of a pattern observed towards the close of 2021, which was succeeded by a significant decrease in value. This similarity in price dynamics raises the prospect of a comparable downturn occurring at some point within this year as well.
My long-term targets for this trade are 13949, 11804, and 10512 in extension.
From a fundamental perspective, S&P Global Ratings recently downgraded Associated Banc-Corp and Valley National Bancorp due to funding risks, and UMB Financial Corp, Comerica Bank, and KeyCorp for deposit outflows and high interest rates.
This move could impact the struggling banking sector, still recovering from the fallout of this year's Silicon Valley Bank and Signature Bank collapses, which triggered a deposit run. However, the situation has not yet led to a substantial market selloff driven by panic.
S&P's action mirrors Moody's recent downgrades of ten U.S. banks and review of six more, including Bank of New York Mellon, US Bancorp, State Street, and Truist Financial. Fitch Ratings also hinted at potential downgrades, including for JPMorgan Chase, if the sector's conditions worsen.
If the banking sector continues to deteriorate due to escalating panics, financial markets could face adverse repercussions.
The health of the banking sector reflects the overall economic health, and any distress can lead to decreased lending, affecting businesses' operations and profitability. Since the NASDAQ and S&P 500 encompass a range of industries and sectors, their performance is interlinked with the banking sector's stability. As such, prolonged turmoil in the banking sector could potentially exert the most pronounced impact on these two indices, influencing market dynamics at a larger scale.
The NASDAQ is composed mainly of technology and growth-oriented companies, which tend to be sensitive to changes in market sentiment. A worsening banking sector can create an environment of uncertainty and reduced investor confidence, causing investors to reevaluate their risk exposure, including investments in tech companies.
I believe that the recent market upswing might be a deceptive bull trap, orchestrated to create a perception that the repercussions of elevated interest rates are less severe than initially anticipated. However, underlying signs are emerging, particularly within the bond markets and various sectors, that hint at the potential for an unforeseen market decline at these elevated levels. It is prudent to closely monitor price dynamics on charts as they unfold, enabling us to gain deeper insights into market behavior and prepare for any potential shifts. The interplay between market sentiment, interest rates, and sectoral impacts demands careful observation as we navigate this complex landscape.
Goodluck!
M.Y.
My long-term targets for this trade are 13949, 11804, and 10512 in extension.
From a fundamental perspective, S&P Global Ratings recently downgraded Associated Banc-Corp and Valley National Bancorp due to funding risks, and UMB Financial Corp, Comerica Bank, and KeyCorp for deposit outflows and high interest rates.
This move could impact the struggling banking sector, still recovering from the fallout of this year's Silicon Valley Bank and Signature Bank collapses, which triggered a deposit run. However, the situation has not yet led to a substantial market selloff driven by panic.
S&P's action mirrors Moody's recent downgrades of ten U.S. banks and review of six more, including Bank of New York Mellon, US Bancorp, State Street, and Truist Financial. Fitch Ratings also hinted at potential downgrades, including for JPMorgan Chase, if the sector's conditions worsen.
If the banking sector continues to deteriorate due to escalating panics, financial markets could face adverse repercussions.
The health of the banking sector reflects the overall economic health, and any distress can lead to decreased lending, affecting businesses' operations and profitability. Since the NASDAQ and S&P 500 encompass a range of industries and sectors, their performance is interlinked with the banking sector's stability. As such, prolonged turmoil in the banking sector could potentially exert the most pronounced impact on these two indices, influencing market dynamics at a larger scale.
The NASDAQ is composed mainly of technology and growth-oriented companies, which tend to be sensitive to changes in market sentiment. A worsening banking sector can create an environment of uncertainty and reduced investor confidence, causing investors to reevaluate their risk exposure, including investments in tech companies.
I believe that the recent market upswing might be a deceptive bull trap, orchestrated to create a perception that the repercussions of elevated interest rates are less severe than initially anticipated. However, underlying signs are emerging, particularly within the bond markets and various sectors, that hint at the potential for an unforeseen market decline at these elevated levels. It is prudent to closely monitor price dynamics on charts as they unfold, enabling us to gain deeper insights into market behavior and prepare for any potential shifts. The interplay between market sentiment, interest rates, and sectoral impacts demands careful observation as we navigate this complex landscape.
Goodluck!
M.Y.