As regular 80-20 Investor members know, periodically I like to look at what technical analysis suggests about where key markets might be headed next. The last time I did this was a year ago, back in May 2020, as markets were trying to recover from the coronavirus induced market sell-off. Given that most equity markets are near all-time highs (or at least multi-year highs) I think now is a good opportunity to look at what technical analysis is telling us about the current market environment.
Technical analysis is not a crystal ball but instead gives you a range of possible outcomes and levels to watch. In volatile market conditions, such as those we are experiencing now, technical analysis tends to prove particularly useful and traders and professional investors start to pay greater attention to it.
As ever, I like to recap what technical analysis is and how it works.
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