Fundstrat’s Mark Newton: Correction Coming? What It Means for Year-End

Introduction

This tutorial provides insights from Fundstrat's Mark Newton regarding the current state of the stock market, crypto, and commodities. It outlines key technical indicators, market sentiments, and future outlooks that can help investors and traders make informed decisions.

Step 1: Analyze Current Market Sentiment

• Sentiment Indicators: Review sentiment indicators such as the AAII (American Association of Individual Investors) survey, Fear & Greed Index, and VIX slope.
• Current State: Currently, sentiment is neutral, indicating no extreme bullish or bearish trends. This suggests a balanced market with potential for both upward and downward movement.

Step 2: Understand Technical Indicators

• Overbought Signals: Recognize that indicators like the Relative Strength Index (RSI) are showing overbought conditions.
• Resistance Levels: Be aware of key resistance levels, with a channel top identified at 6,720. This is where the market may face challenges in its upward movement.

Step 3: Monitor Economic Indicators

• Earnings Reports: Keep an eye on corporate earnings, which have generally exceeded expectations. This can support bullish market conditions.
• Federal Reserve Actions: Stay updated on Fed policy changes, especially regarding interest rates, as they can significantly impact market dynamics.

Step 4: Plan for Market Cycles and Seasonality

• October-November Choppiness: Prepare for potential market volatility in October and November. Historical patterns suggest this period may see fluctuations.
• Strategy: Consider buying during dips to position for a year-end rally, as Q4 typically shows bullish behavior.

Step 5: Set Year-End Targets

• Targets: Establish year-end targets around 6,650, but be prepared to reassess post-October/November pullbacks.
• Long-Term Outlook: While the near-term looks promising, expect a consolidation phase before any significant upward movements.

Step 6: Recognize Behavioral Trends

• Market Psychology: Understand that current market sentiment is not euphoric, which is a positive sign. A contrarian approach suggests that when negativity is high, it may indicate buying opportunities.
• Diversification: Focus on diversifying your portfolio to ride trends rather than resisting them.

Step 7: Consider Commodity and Crypto Outlooks

• Commodities: Expect a potential bottom in oil prices around $58-59, with a subsequent rally leading into 2026.
• Crypto Predictions: Watch for potential growth in altcoins, with forecasts for Ethereum reaching $5,500 and Bitcoin potentially hitting $130,000 by October.

Conclusion

In summary, Mark Newton emphasizes the importance of monitoring sentiment, technical indicators, and economic factors to navigate the current market landscape. Investors should prepare for short-term volatility while remaining optimistic about potential year-end rallies. Focus on riding trends, maintaining a diversified portfolio, and being cautious of overbought conditions. Consider leveraging insights from ongoing research for informed decision-making.