{"id":76369,"date":"2025-09-21T03:38:25","date_gmt":"2025-09-21T03:38:25","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/76369\/"},"modified":"2025-09-21T03:38:25","modified_gmt":"2025-09-21T03:38:25","slug":"stock-market-flashing-3-signs-a-drop-could-be-coming-bofa-says","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/76369\/","title":{"rendered":"Stock Market Flashing 3 Signs a Drop Could Be Coming, BofA Says"},"content":{"rendered":"

The stock market is flashing a handful of signs that the latest rally may be about to reverse course, one of Bank of America’s top technical<\/a> strategists said. <\/p>\n

Paul Ciana, the global chief technical strategist at BofA, said in a client note on Monday that the market looks like it is facing a handful of “key risks” from a technical perspective. Those factors could challenge the recent rally that’s pushed the market to all-time highs<\/a>. <\/p>\n

“After reaching our 6,500 summer target, the SPX<\/a> rose to another new high. Our 6,625 secondary\/overshoot target is within striking distance,” Ciana wrote.<\/p>\n

Here are some of the risks he’s watching. <\/p>\n

1. Worst 10 days of the year are approaching<\/p>\n

\"Chart<\/p>\n

The S&P 500 has been historically weak in the last 10 days of September during election years.<\/p>\n

Bank of America Global Research\/Bloomberg<\/p>\n

The summer-to-fall transition tends to be rough for stocks, with the S&P 500 typically seeing its worst performance in September<\/a>. But the market could now be on the cusp of the worst week-and-a-half-long stretch of the year, Ciana wrote.<\/p>\n

Historically, the last 10 days of September tend to have the largest downside risk for stocks. The S&P 500 is only up 40% of the time during that period with an average return of -1.1%, according to the bank’s analysis of stock data dating back to 1928.<\/p>\n

The outlook looks even worse when it’s a year that kicks off a president’s term in office, like 2025. In the first year of a new presidential cycle, the index is only up 29% of the time and posts an average return of -1.5% during the last 10 days of the month.<\/p>\n

Ciana noted that the last 10 trading days of the month are set to begin on September 17. That coincides with the Fed’s next rate decision<\/a>, which investors generally expect to be a volatile day for trading.<\/p>\n

“The first 10 days are weak, too, but so far this year the market has looked past this,” Ciana said of the long-running pattern.<\/p>\n

2. The Dow hasn’t confirmed its recent breakout<\/p>\n

\"Chart<\/p>\n

The Dow recently slipped below its trend line support, Bank of America said.<\/p>\n

Bank of America Global Research\/Bloomberg<\/p>\n

The Dow Jones Industrial Average<\/a> recently ascended to a fresh all-time record, but the Dow Jones Transportation Average, a separate index that’s linked to the benchmark index, has lagged.<\/p>\n

Related stories<\/p>\n

\"\"\/<\/p>\n

Business Insider tells the innovative stories you want to know<\/p>\n

\"\"\/<\/p>\n

Business Insider tells the innovative stories you want to know<\/p>\n

“The Transportation average<\/a> has not broken above anything relevant to confirm the breakout,” Ciana said of the Dow Jones Industrial Average’s recent rally.<\/p>\n

The Dow Jones Transportation Average also recently dipped below its “trend line support,” and its 200-day simple moving average is declining, according to BofA’s analysis. Those could be interpreted as signs that the index is losing momentum.<\/p>\n

3. Breadth signals are weakening<\/p>\n

Several indicators of market breadth<\/a>\u2014which measure the proportion of stocks that are rising versus those that are falling\u2014are starting to pull back. <\/p>\n

The NYSE advance-decline line<\/a>, which measures the number of stocks listed on the NYSE that are rising versus falling, has stalled recently.<\/p>\n

Meanwhile, stocks in the S&P 500 trading above their 50-day moving average look like they’re making “lower highs,” Ciana said.<\/p>\n

The number of stocks in the S&P 500 that register as “overbought” according to the relative strength indicator<\/a> has also declined.<\/p>\n

“A tech led rally could exacerbate these divergences. To positively resolve them, a broad market rally will be needed,” Ciana said.<\/p>\n","protected":false},"excerpt":{"rendered":"The stock market is flashing a handful of signs that the latest rally may be about to reverse…\n","protected":false},"author":2,"featured_media":76370,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[175],"tags":[51706,51707,79,11408,193,18,19,18599,17,1082,188,16061,8743,523,1084,25701,1086,51708,1093,3257],"class_list":{"0":"post-76369","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-average-return","9":"tag-bofa","10":"tag-business","11":"tag-day","12":"tag-dow-jones-industrial-average","13":"tag-eire","14":"tag-ie","15":"tag-index","16":"tag-ireland","17":"tag-market","18":"tag-markets","19":"tag-paul-ciana","20":"tag-rally","21":"tag-risk","22":"tag-sp","23":"tag-september","24":"tag-stock","25":"tag-stock-market-flashing","26":"tag-time","27":"tag-year"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/76369","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=76369"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/76369\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/76370"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=76369"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=76369"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=76369"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}