Castle Securities strategist Scott Rubner believes that the AI sector selloff has already priced in a valuation bubble; meanwhile, the prevailing bearish sentiment could serve as a reversal catalyst. Based on historical data from backtests, during mid-term election years the average S&P 500 gain from late September to year-end is 5.6%. He also noted that technical conditions and supply-demand dynamics remain unfavorable for the stock market before the end of the month, and that U.S. stocks still have further downside potential over the next two weeks.
Castle Securities strategist Scott Rubner believes that the U.S. stock market is at a temporary low point, and that the market structure is beginning to improve. Investors should take advantage of the additional pullback window before the end of the month and add to core assets on dips.