United States
Time to Turn Defensive
Cross Asset Strategy198 Views, 17 Jan 2022 05:14
EXECUTIVE SUMMARY
- We wrote a week ago that investment-oriented accounts should turn cautious on the stock market, but traders shouldn’t be ready to turn bearish just yet.
- The sell signal has arrived and the tone of the stock market is turning decidedly bearish.
- Technical internals are deteriorating and our base-case scenario calls for a 5–10% pullback. A downdraft of 20% represents an outlier case but would need a major catalyst.