On May 11, 2022, the capital flow of US stocks fell back to the key point – the first bottom support. In the capital flow data of the US stock secondary market we monitored, by comparing the historical data of US stock capital flow since 1998, we found that the bottom level of the cycle of relative net capital inflow in history was between – 0.1% and – 4%. Therefore, we define the upper and lower limits of the historical bottom distribution range as the first level bottom support and the second level bottom support respectively.
From the historical data of the past two decades, the first and second bottom support levels represent different support levels respectively. Among them, the second bottom support level is the strongest. In history, after the bursting of the foam of the science and technology network in 2000 and the financial crisis in 2008, the capital flow of us stocks fell back to the second bottom support level. In addition, most of the time, the market bottomed out and rebounded after falling back to the first level of bottom support. Considering the current complex macro situation: the normalization process of global monetary policy, the rare inflation pattern in decades, the emergence of the “stagflation” pattern that makes the global central bank in a dilemma, the repeated rebound of the global epidemic, and the changes in the global complex geopolitical pattern, we believe that the real bottom of US stocks should be between the first level bottom support and the second level bottom support. However, the oversold of US stocks in the short term is serious, which is likely to lead to a technical rebound in US stocks in the short term. For details, please refer to “US stock capital flow falls back to the first-class bottoming support level, and the short-term rebound is expected, but there is still room for downside”.
