S&P 500 Tests June’s Lows – Investing in the Markets
An important week is ahead of us, one that several technical traders will say might determine the fate of the S&P 500. Three months ago in June, the S&P 500, regarded as the “pulse” of the American corporate economy, reached a level of resistance that influenced the strength of the bear market rally that lasted until September. That level of support was around 3,636, and last Friday the S&P had teased the line, getting as low as 3,647.
This week will be one of the most important weeks in determining which tide the market will turn. If the resistance is as strong as it was in June, then we could see another bear market rally that can last weeks. But if investors still seem unsettled by the growing chance of a recession, then that significant level of resistance can break, and we would have to wait and see exactly where the new bottom would be set. Currently, this market has set historic lows for investors who have tried buying the dips. According to Dow Jones Market Data, the S&P 500 has had an average decrease of 1.2% in the week following a one-day loss of at least 1%. This metric hasn’t been that low since 1931, and the current year’s loss of 23% in the S&P 500 is on track to match the decline of 2008.
Nevertheless, with global central banks following the Fed’s path of raising interest rates, investors should be keen on how the market will react this week and if the S&P 500 will break its 3-month bottom.
Want to learn how to play the markets? Download the invstr app, where you can play fantasy finance, or open a brokerage account and play for real. Also, have a go at our Academy to understand how the markets work.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.