The S&P 500 could fall another 5% and test a critical support level that has previously marked the bottom, Bank of America says

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  • The S&P 500 may fall one other 5% to check a essential help stage, in response to Financial institution of America.

  • BofA’s Michael Hartnett highlighted the S&P 500’s 200-week shifting common as a key line within the sand.

  • It has marked the underside for shares in 2022, 2018, 2016, and 2011.


The S&P 500’s 10% decline for the reason that finish of July is placing the index inside putting distance of a essential technical help stage, in response to Financial institution of America.

Funding strategist Michael Hartnett stated in a Thursday observe that 3,941 is a key stage to look at for the S&P 500, as that represents the index’s rising 200-week shifting common. A sell-off to that mark would characterize one other 5% decline from the present stage of about 4,143.

The 200-week shifting common measures the typical worth of the S&P 500 over the previous 4 years, and it has been constantly rising ever since 2012. The S&P 500 has had an inclination to check this line in periods of market stress over the previous decade.

Market sell-offs in 2016, 2018, and 2022 hit the S&P 500’s 200-week common nearly to the penny, with the index swiftly bouncing off of that stage to then go on and proceed its multiyear uptrend.

The 200-week shifting common was briefly violated and didn’t maintain as preliminary help in the course of the COVID-19 sell-off in March 2020.

A continued decline to the 200-week shifting common seems to be extra seemingly because the S&P 500 equal-weight index dipped under a stage that Hartnett flagged as essential.

In the meantime, the S&P 500 just lately broke under a shorter-term technical help stage: the 4,180 to 4,195 vary, in response to Fairlead Methods’ Katie Stockton.

However there are indicators that buyers are beginning to benefit from the latest downturn in mega-cap tech shares, with Hartnett observing that the tech sector noticed its largest influx in eight weeks after buyers bought $2.0 billion value of shares.

“Buyers ‘buying-the-dip’ in tech,” he stated.

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