Could a Correction Be Coming for the Stock Market? By StockNews – Investing.com

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Could a Correction Be Coming for the Stock Market?

We’ve had some interesting developments as we enter earnings season. You can kind of see it with the S&P 500 (SPY) if you squint, but it’s much clearer with the which is down 6.5% over the last 3 weeks and 1.5% today. In contrast, the S&P 500 made new highs this AM before reversing lower. This is the market we have – the large-cap indices are levitating higher, while the rest of the market is chopping around in a sideways manner. Based on previous instances of similar behavior, we could see the lagging parts of the market catch a bid, leading to another leg higher, or the large-caps could experience some profit-taking, leading to a deeper pullback. Today’s commentary will discuss these scenarios and the recent inflation data. Read on below to find out more….(Please enjoy this updated version of my weekly commentary from the POWR Growth newsletter).

First, let’s take a quick look at the 3-week, hourly chart of the S&P 500 and Russell 2000:

Last week we discussed the bifurcated market. As these charts make clear, the bifurcated market got even more bifurcated.

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