On Wall Street, the New York Stock Exchange is struggling to stabilize, after suffering a wave of massive selling in recent weeks. The Nasdaq has fallen almost 30% since the all-time high in the fall of 2021 and more than 20% since the peak in April 2022, i.e. in less than two months. “The Dow Jones is on course for its eighth consecutive negative week, for the first time since 1932, while the S&P 500 (stock barometer on Wall Street, editor’s note) and the Nasdaq are on course for their worst series of losses weekly since 2001…”, emphasizes John Plassard, investment specialist at Mirabaud Securities. A series of historically rare losses, therefore.
Some players could suddenly be tempted by a “bargain hunt”… to be put into perspective, however, some players still consider US equities as too expensive. Especially since the outlook for profits is more uncertain and risks being revised downwards, against a backdrop of pressure on economic growth. And that long-term bond rates have taken off, weighing on the attractiveness of US equities.
What does technical analysis say?
“At the beginning of April, and after seeing the S&P 500 fail to stay above its 40-week moving average (curve in red on the chart below, currently at 4,462 points), we set an academic target and cautious at 3,804 points, the 38.2% Fibonacci retracement of the 2020-2022 rally (+120%). A goal almost achieved,” says Robert Haddad, of Banque SBA.
To avoid further losses, the S&P 500 “will absolutely have to preserve the support of 3,804 points, and, better still, break through the resistance of 4,114 points, which could favor the rally of 4,462 points. Conversely, in the event of failure, if the support of 3,804 points were to be pressed, the bloodbath should a priori resume, with a bearish objective of 3,505 points in sight”, judges the expert.
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