According to data from FactSet, the S&P 500 index is expected to experience its third consecutive daily decline on Wednesday. This is the first time the index has experienced a losing streak since May 4th. However, this does not indicate that the index’s positive trend has ended. It is more likely that the upward trend is just beginning.
Steve Suttmeier, who works as a technical research strategist at BofA Global Research, believes that as long as the large-cap gauge doesn’t drop significantly below 4,200, which was a strong resistance level for stocks between August and June, the market’s bullish trend will remain intact even if there are minor declines.
In a message to customers that MarketWatch received on Wednesday, the individual stated that if the 4300 to 4200 areas were held during temporary declines, it would create a positive breakout and a pattern of retesting.
If the index falls below 4,200, it may still receive support at around 4,100 or 4,050. Recent data from FactSet shows that the S&P 500 had left the bearish market zone after a year when it closed 20% higher than its low closing number of 3,577.03 on October 12th.
Thanks to the exceptional performance of a few very large technology stocks, the index has increased by almost 14% since the beginning of the year, but recently the rally has begun to encompass a wider range of stocks.
As stated by Suttmeier, enhancements to the moving averages displayed on price charts and the creation of a positive ‘bullish cup-and-handle pattern’ indicate that the S&P 500 has already entered a bullish breakout period that anticipates further growth.
In the near future, it is possible for the S&P 500 to go beyond 4,500 during the rally. This would be a remarkable improvement since, not long ago, even the most optimistic economic analysts only predicted that the S&P 500 would reach 4,500 or more by the end of 2023.
According to FactSet data, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average are all expected to experience decreases on Wednesday. The S&P 500 is down by 0.3%, the Nasdaq Composite by 0.8%, and the Dow Jones Industrial Average by 0.1% due to Fed Chair Jerome Powell’s announcement of a possible two more interest-rate increases this year. As per FactSet data, they will all sustain weekly losses.
