S&P 500 Market in Correction

The S&P 500 has reached a Market Top in the first week of Jan 2022.

Since then the markets have entered a Corrective Phase

Fundamental reasons are linked to Pandemic related supply issues with skyrocketing inflation. All central banks , bar BOJ , have entered into a rate hiking cycle. The Fed is the most bullish of all.
Rising interest rates is bearish for stock markets. As such , the Bond Market has yields moving dramatically up for all the majors.

Technically we see

1. Corrective Phase - are usually 3 legs down. The first 2 are complete . We may be into the final leg down.

2. Fibonacci Retracement - the .50 and .618 retracements for the pandemic rally may offer some guide to where price may be headed.

3. Support and Resistance - the pre pandemic market high on 17th Feb 2020 and the support level of 21st September 2020 may offer support to this corrective phase.

4. Moving Averages - price has broken the 50 MAV (11 weeks) , the 100 MAV ( 4 weeks) and is now fast approaching the 200MAV. This 200 MAV may stall price here for 4-11 weeks.

5 Stochastics - momentum has been to the downside. However presently it has not reached the oversold zone. This suggests we are not at any bottom presently.


Sentiment = beyond this chart , I like the CNN Fear and Greed Index = which is a composite of Market Momentum , Stock Price Strength, Put and Call Options, Market Volatility , Safe Haven Demand, Junk Bond Demand. Of all of these components have market participants Fearful to Extremely Fearful.

The absolute bottom, who knows !