值得注意的是，小型股基准The Morgan Stanley strategy team pointed out last Sunday that after a significant decline since February, recent US stocks are showing signs of a short-term rebound.
According to the Zhito Finance APP, the Morgan Stanley strategy team pointed out last Sunday that after a significant decline since February, recent US stocks are showing signs of a short-term rebound. The bank's analysis shows that current market sentiment and position indicators are both in an oversold state since 2022. Coupled with expectations of seasonal trading recovery in late March and the potential boost from a weakening dollar to first-quarter corporate earnings, the market is likely to welcome a technical repair.
However, despite the presence of rebound momentum in the short term, From a technical perspective,there are still hidden worries. The S&P 500 Index, NASDAQ 100 Index, and E-mini Russell 1000 Growth/Value Index have all fallen below the 200-day moving average, which has now turned into a Resistance Level.Support.Converted to Resistance.
It is worth noting that the small-cap stock benchmark E-mini Russell 2000 IndexIt has fallen below the 200-week moving average for the first time since the 2022-2023 bear market, indicating a clear degree of technical damage.
As of last Thursday, the S&P 500 Index has reached the lower end of the range predicted by the firm for the first half, at 5,500 points (actual close 5,505 points). Last Friday, market performance showed that the rebound was led by previously oversold low-quality, high-volatility Stocks, but Morgan Stanley warned that the core contradictions driving this round of adjustment have not yet been resolved.
Multiple pressures are hindering long-term trends.
In fact, the main cause of the current market volatility is not only the new tariff policy of the Trump administration; deeper pressures stem from last year's excessively high valuations, the increase in the dollar and long-term interest rates after the Federal Reserve paused interest rate cuts, as well as new challenges faced by the Technology Industry.
In addition, capital expenditure growth for AI is expected to slow down by 2025, which may impact the performance of big Technology companies. Meanwhile, the fiscal deficit in the USA for the fourth quarter of 2024 surged by 40% year-on-year, and the continuously widening fiscal gap will become a drag on economic growth.
Policy uncertainty is also a concern. The newly established Department of Government Efficiency (DOGE) by the Trump administration, combined with tightened immigration policies and unexpected tariff measures, is pressuring stock market valuations by lowering PE ratios.
Although a short-term rebound window may have opened, Morgan Stanley remains cautious about long-term recovery. Downgraded economic growth expectations are putting pressure on stock valuations, and although quarterly earnings may experience a seasonal rebound, sustained improvement will still require time to validate.
From the policy perspective, the likelihood of implementing stimulus measures such as tax cuts and regulatory relaxation in the short term is relatively low. If the Federal Reserve is to restart easing, it must see significant deterioration in the labor market or credit market, and neither of these scenarios is a bullish signal for the stock market.
Morgan Stanley strategist Michael Wilson summarized: "The current rebound is more likely to be a low-level fluctuation within the range of 5500-6100, and to break through to new highs, significant easing of economic growth resistance or a shift back in monetary policy is required."
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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