The U.S. stock market is in a potential resistance zone, and we may have seen a completed, 3-wave corrective pattern up from the 2/8 lows.
The NDX’s 4234 close at the end of last week is very close to a Fibonacci .382 retracement of the decline from Dec. 2 to Feb. 8. The precise .382 retracement level was 4213. The NDX is also close to its interim high on Feb. 1.
A lot of U.S. economic data is coming out this week (including manufacturing, pending home sales, and employment). The data needs to show that the economy has not slowed any further over the past month. If the upcoming data points toward economic stabilization, then I expect the stock market to continue rising in the coming months given that we’ve already had two declines of 15-20% over the past year. But if economic data points to risk of a recession, the market’s correction will probably resume and hit new lows.