A Looming Correction in Equity Markets?

The past two weeks saw no new progress in many US stocks. Looking at Dow Jones, it is clear that its sharp rebound from 22,000 is halting near its former resistance (see Featured Chart).

Even the tech darlings like FAANGS have not been performing well since mid-January. Amazon Inc, for example, has not progressed beyond its January peaks at $1,700 (see below). Apple and Netflix are too held back. Performing better are Google and Microsoft, which are still on an uptrend.

Even banks, the lifeline of a modern economy, are struggling to extend their rebounds, including Goldman Sachs (see below). Resistance at $200 is capping its uptrend.

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With the day-to-day macro economic data coming in slightly below expectations, I would not rule out a potential pullback in equities. Two weeks ago, I pointed out some long positions in volatility might be warranted. This remains the case.

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