Yes, of course its possible that its a good setup for a crash; the issue is how probable? Yesterday the S&P did drop 3.5% early but then buyers came in and it was gaining strength for the rest of the day; and ended up only .8% downvincecate wrote: ↑Tue May 24, 2022 10:57 amSomething may be happening. Nasdaq is down 3.5% right now. If we continue down through Friday then 3 day weekend could be a good setup.
Lets examine whats probable: The market's PE ratio is much too high for current economic circumstances; there will be a correction of PE ratio back down to historical levels. On this basis alone to justify a S&P index of over 2000 is very difficult. More likely 1400 and with a typical human overshoot say 1000.
The question is the timing and the path. My own suspicion is one crash and then a two year grinding horrible drift down (Unless you are short in which case happiness).
But maybe you are right that Black Tuesday comes again next week.
For those who enjoy going short bear in mind that short stock can dry up very quickly and suddenly you find that there is no platform permitting more shorts