U.S. equities fell sharply on Tuesday as banks faced pressure from falling yields, while investors turned their eyes to a key House vote.
The Dow Jones industrial average fell around 237 points, with Goldman Sachs contributing the lion's share of the losses. The S&P 500 dropped more than 1 percent, with financials falling more than 2.5 percent to lead decliners. The indexes were also on track for their worst session since October.
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Behind the scenes, our target for a turning point for a correction was late February but looking forward we are due for that correction anytime.
The concern I have is that Trump is being attacked on all sides to really prevent any reform agenda and that means also the delay of massive tax cuts. The difficulty in unwinding Obamacare is also starting to weight upon the market as people become pessimistic about reform. The liberal arms of both parties know the only way they are out of office if they do not prevent the tax cuts and healthcare bill from passing quickly.
Keep in mind that mainstream media is desperately trying to stop Trump. Therefore, the more negative news they can dish out, the more they will impact the stock market negatively in the short-term.
So, pay close attention to a daily closing below 20,692.0 in the Dow which will warn that a correction is likely. The cycle points through the into the April/May time period.
So, for those of you who like to buy at temporary lows, one is now coming soon.
I will keep you posted. Follow the arrows and system rules.
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