Was Friday the Pause Before the Next Leg Down?
Friday’s sharp intraday recovery showed that buyers are still present. It did not confirm that the market has formed a low.
In this update, Garry Davis explains why forced selling and leverage are creating unusually fast market moves, what the next six weeks of major earnings could reveal, and why a repeatable process matters more than predicting the top or bottom.
Markets are at an important crossroads. Friday’s rebound was constructive, but the recovery did not hold strongly enough to confirm a change in control from sellers to buyers. At the same time, the resilience of US small caps suggests this may still be a rotation and leverage reset rather than a wholesale exit from equities.
The next phase will be shaped by major US earnings, guidance and—most importantly—how markets respond in the 48 to 72 hours after each result. A strong report is no longer enough if investors are unwilling to reward it.
Key message
This is not a time for heroic predictions or automatic dip-buying. Raise or reduce exposure according to the evidence, manage weightings and cash levels, and wait for the charts to show that buyers have regained control.
What you’ll learn
- Why Friday was a signal, but not confirmation of a market low
- How leverage and forced selling can overwhelm strong fundamentals
- Why the next six weeks of earnings could influence global market direction
- What would indicate that buyers are beginning to regain control
- How pre-planned weightings, cash levels and exit rules reduce emotional decisions
- Why a strong process remains valuable even when an individual call is early or wrong
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Any advice in this video is general advice only. Neither your personal objectives, financial situation or needs have been taken into consideration. Accordingly, you should consider how appropriate the advice, if any, is to those objectives, financial situation and needs, before acting on the advice. Garry Davis (AR No:317590) is an authorised representative of Primary Securities Ltd (AFSL No. 224107).
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Past performance should not be taken as an indicator of future returns.
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