Fairlead Strategies analyst Katie Stockton warns investors of looming declines in the S&P 500 and Nasdaq-100 due to key technical sell signals. While equities face potential downturns, agricultural commodities like the Invesco DB Agriculture Fund are showing bullish momentum, indicating a possible shift in market trends.
S&P 500 and Nasdaq Face Short-Term Decline Risks
On Tuesday, analyst Katie Stockton of Fairlead Strategies issued a note in which she predicted that the S&P 500 and the Nasdaq-100 would fall in the near future due to important technical signs, Investing.com shares.
Stockton claims that yesterday, the NDX "flashed a daily MACD 'sell' signal," and that today, the SPX "is poised to follow."
Some say these signals point to increasing danger on the downside. "Initial downside risk for the SPX and NDX is defined by their 50-day MAs, near 5,780 and 20,140, respectively," he said.
Indicators Highlight Potential for Deeper Market Corrections
Although there are some negative short-term signs, Stockton says that "our intermediate-term gauges point higher for the SPX, for now." A "weekly stochastic downturn" may indicate a more substantial correction is on the horizon, though, as she warns.
The biotech industry is another area that Stockton points out as being weak. On Friday, the SPDR Biotech ETF "broke down below support near ~$95," indicating a loss in the intermediate term.
Biotech Sector Faces Further Declines
Based on stochastics indicating space to move lower and a "weekly MACD more decisively on a 'sell' signal," she finds that XBI's next support zone will be between $88 and $89, defined by a Fibonacci level and the weekly cloud.
Agricultural commodities are showing strength, according to Stockton, which contradicts the negative stock market prediction.
Agricultural Commodities Defy Equity Market Trends
One possible explanation is that the Invesco DB Agriculture Fund (DBA) is "emerging from a multi-week correction in its long-term uptrend." The final obstacle near $26.50 is within reach, according to her, because of the breakout above its daily cloud and improved intermediate-term gauges.
While commodities like DBA demonstrate durability, equities have short-term hurdles, according to the technical signs.


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