Dow 12050 may not be too far from “bottom” of current correction
Current correction is largely due to re-evaluation of fundamentals, which is kind of done on growth dimension, but not yet on inflation dimension. So if the incoming PPI and CPI data are not too bad, the re-evaluation of fundamentals may be close to the end.
Aside from FA side, Citadels need to put money somewhere, and 10Y Treasury yield is now all time low YTD at about 4.5%.
Dow’s intra-day low of 12050 on 030507 may not be far away from the bottom of current correction, but 12050 needs to be re-tested and confirmed. Without that confirmation, it would be difficult for bulls to launch any meaningful rally as defined by IBD.
Today traders closed Dow’s opening gap on 030807, and 12176 may be today’s lower limit.
marketreflections.com
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