S&P 500 Trading Outlook (3-5 days): Â Mildly Bearish into Wednesday, but expecting LOW in Stocks Wed-Friday of this week.
Optimal targets for the S&P 500 are at 2510-3 and maximum target of 2482-9 on this first go-around.
It’s important to let this decline run its course, but the stock market indices look to be nearing support in time and price.
Moreover, time cycles project this week to be a turning point for the stock market. And given the decline, it should mark a low for stocks for a bounce into year end. As well, sentiment continues to worsen, and Equity Put/call has now reached levels coinciding with prior market bottoms.
Overall, it’s still difficult to try to fight this tape from an investment standpoint until prices stabilize. We really need to get back up over 2583 on the S&P 500 (at a minimum) before one can have confidence.
That said, news of a China deal could be a catalyst. Or perhaps a quick, sharp move lower on the Fed could bring a reversal. While momentum and trends remain awful, the near-term technical picture combined with cycles, counter-trend exhaustion and sentiment should provide at least some near-term relief.
S&P 500 Index Chart
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Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
