August 30, 2022, 12:58 pm EDT
The technical rebound is officially over as all indexes gave up their last defense 50-day-moving-average line. This rebound failure is fatal to the stock markets from a technical analysis point of view. Due to a lack of support, all indexes may go down to the previous low on June 20.
From the economic side, no one wants to fight with the Fed when it said to keep raising the rates until inflation is under control to 2%. Having CPI at 8.5%, it would be difficult to gauge how long Fed will reach its goal. High inflation or higher rates will put pressure on the US economy so there is no quick and suitable solution for the Fed or anyone to control the direction. In other words, we do not see the big picture of roaring bears changing in the next 6-12 months.
Staying in defense is the best strategy to protect the portfolio for this market.