S&P 500 Showing Signs of Weakness, Correction May Be Coming After Big Rally

The S&P 500 is showing technical signs of weakness and rolling over, with broken uptrends and negative momentum indicators. There is a high chance of a 10%+ decline.

After the huge rally since 2020, the S&P 500 and Nasdaq are only up 8% and 10% respectively in the last 2+ years. Investors forget stocks also go down.

As a risk manager focused on capital preservation, the author is defensive with lots of Treasury bills, only halfway to full stock exposure, and using options to hedge.

The relative strength of mega cap stocks means any decline may hit them less. So QQQ looks better than SPY for now.

This is not a prediction of a crash, but rather a methodical assessment of rising risks to guide smart position sizing and asset allocation.