We could see a new low relative to the April low, says Fairlead's Katie Stockton

About this Video

• Video Title: We could see a new low relative to the April low, says Fairlead's Katie Stockton
• Channel: CNBC Television
• Speakers: Katie Stockton
• Duration: 00:05:10

Introduction

This CNBC interview features Katie Stockton, founder and managing partner of Fairlead Strategies, discussing her market outlook. Stockton predicts a potential new low for the S&P 500, relative to the April low, despite the recent market rebound. She analyzes the situation using technical indicators and explains how this impacts risk management strategies.

Key Takeaways

• Short-Term Upside Exhaustion Imminent: Stockton anticipates signs of short-term upside exhaustion within the next week, based on Demark indicators. This suggests a potential market downturn.
• New Lows Predicted: Due to significant losses in long-term upside momentum (evident in monthly charts), Stockton believes new lows relative to the April low are possible for the S&P 500 and other indices.
• Bear Market Cycle: Stockton views the recent rally as a "violent but welcome relief rally" within an ongoing bear market cycle, expected to last until the end of the year.
• Risk Management Strategies: She advises monitoring moving averages (like the 20-day) and stochastics for signals to reduce market exposure. The VIX is another risk metric to watch. Higher beta stocks are particularly vulnerable.
• Bitcoin Correlation: Bitcoin's current correlation with high-beta stocks is noted, indicating it's treated as a risk asset. Stockton holds a neutral long-term bias on Bitcoin.