Thread by @getfinsight

Nasdaq #NDX has a monthly support around 10800 on a CLOSING basis. 8 trading days left. Given the current sentiment, markets could put a bottom in place after a panic selling.

1/n

On S&P 500 #SPX, the parallel channel has a support near 3520 for the month on a CLOSING basis.

2/n

Viewing this along with sentiment data, there is a strong case of a bounce back. For this we look at consumer sentiment, asset manager sentiment and trader sentiment. Univ of Michigan Consumer Sentiment reading hit 59 in march & got a temporary bounce in April.

3/n

We are yet to get June data, but its likely to have plummeted further due Fed rate hikes. In the past, at reading of 56 on the same index had put in a bottom on S&P 500 #SPX, including 2008. And we should be near that zone for June if not much lower.

4/n

The Asset Managers Positioning on Equity Futures has hit record lows and this level of poor sentiment has lead to a reversal in the past.

5/n

https://twitter.com/MacroCharts/status/1538114310555242497?s=20&t=3eAfJuHRBpjVsloIJ9mbRA

The trader sentiment and positions are also at historical lows. The AAII bull bear spread has hit 58% bears and the number is rapidly increasing each week. With bearish positions starting to overwhelm it is fair to say sentiment is at an extreme.

6/n

Conclusion is that we could see a selling climax with the level of shorts in the sentiment and negative sentiment across the board for Consumers, Asset Managers & Traders. Either this selling climax has already happened/began last week but likely to culminate soon.

7/n

As a word of caution, once bounce materialises it remains to be seen if its temporary or a bullish reversal depending on the strength of rally in breaking key Fib retracements. As far as #Nifty is concerned, its likely to follow the US markets, so could bottom along with it.

8/8

@threadreaderapp, please unroll.

Missed to add the Univ Of Michigan Consumer Sentiment Chart. Here it is.