A Bank of America strategist is sounding the alarm about the stock market, warning that equities are flashing signals that have often foreshadowed a 20% correction.

In an investor note, BofA’s head of US equity and quantitative strategy, Savita Subramanian, urges investors to “take profits,” warning that she’s seeing “too many red flags” in the market, reports Axios.

“Our bear market signposts — the triggers that typically precede an S&P 500 peak — suggest additional caution may be warranted. Today, 70% of our signposts are triggered, in line with the average observed in prior market peaks.”

Subramanian says the signposts are market condition gauges, including the investor assumption that companies will continue to generate profits at a strong pace in the coming years, as well as relaxed credit conditions. She also highlights that she’s seeing very high dispersion in the performance of stocks with high and low price-to-equity ratios, meaning high-valuation stocks are being rewarded, while low-valuation stocks are being left behind.

“Dispersion has been most pronounced within Tech, where the spread between the best/worst-performing quintiles’ median stock is a whopping +120 [percentage points], the highest since Feb. 2000, which reached +130 [percentage points] ahead of the market peak of March 24, 2000.”

Meanwhile, Morgan Stanley CIO Mike Wilson says he doesn’t believe that the stock market will enter bear territory. He says, “In our view, a correction was inevitable and ultimately healthy if this bull market is going to extend into year-end, which remains our baseline.”

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• SOL price started a fresh decline below $82 and $81.20 against the US Dollar.
• The price is now trading below $81.20 and the 100-hourly simple moving average.
• There is a bearish trend line forming with resistance at $82.00 on the hourly chart of the SOL/USD pair (data source from Kraken).
• The price could start a recovery wave if the bulls defend $78.80 or $78.00.

Solana Price Dips From $84

Solana price failed to remain stable above $83.20 and started a fresh decline, like Bitcoin and Ethereum. SOL declined below the $82 and $81.50 levels.

The bears even pushed the price toward $80. A low was formed at $79.01, and the price is now consolidating losses. There was a break above the 38.2% Fib retracement level of the downward move from the $83.26 swing high to the $79.01 low.

Solana is now trading below $81.20 and the 100-hourly simple moving average. On the upside, immediate resistance is near the $81.10 level or the 50% Fib retracement level of the downward move from the $83.26 swing high to the $79.01 low.

The next major resistance is near the $82.00 level. The main resistance could be $82.80. A successful close above the $82.80 resistance zone could set the pace for another steady increase. The next key resistance is $84.50. Any more gains might send the price toward the $85 level.

More Losses In SOL?

If SOL fails to rise above the $82.00 resistance, it could continue to move down. Initial support on the downside is near the $79 zone. The first major support is near the $78.00 level.

A break below the $78.00 level might send the price toward the $75 support zone. If there is a close below the $75 support, the price could decline toward the $70 support in the near term.

Technical Indicators

Hourly MACD – The MACD for SOL/USD is gaining pace in the bearish zone.

Hourly Hours RSI (Relative Strength Index) – The RSI for SOL/USD is below the 50 level.

Major Support Levels – $79.00 and $78.00.

Major Resistance Levels – $81.20 and $82.00.

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