Is a stock market rally coming? I think that is most likely the case. However, to understand why, we must review what we said at the beginning of July:
spooked more bullish investors. The market has declined by roughly 5% from the recent peak through the end of last week.Notably, the correction was orderly, with no signs of financial stress. The following chart shows that volatility did rise somewhat as the stock market declined. However, during periods ofYou can see the difference between the current decline and March during the regional bank failures.
While there could be some additional selling pressure near-term, generally, a bounce occurs when most markets and sectors are nearing more oversold levels.Secondly, analysis of market and sector performance relative to the broad market also provided clues. That analysis, which measures historical volatility, generates risk ranges we can use to determine optimal entry and exit points.As shown, most markets and sectors are trading well below their normal risk ranges.