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S&P 500 Sold Off Again - Is This Still Just a Correction?

Stock-Markets / Stock Market 2022 Dec 07, 2022 - 08:30 PM GMT

By: Paul_Rejczak

Stock-Markets Stock prices suffered another sharp decline yesterday – is this a change of trend?

The S&P 500 index lost 1.44% on Tuesday, as the broad stock market continued its Monday’s 1.8% sell-off. It reacted to Monday’s better-than-expected ISM Services PMI release. On Thursday the S&P 500 reached new local high of 4,100.51, and on yesterday it went closer to the 3,900 level.

This morning the S&P 500 is expected to open 0.3% lower after an overnight decline of more than 1%. We may see a short-term rebound following the recent declines. It still looks like a consolidation within an uptrend. However, the index broke below its two-month-long upward trend line yesterday, as we can see on the daily chart:





Futures Contract Goes Sideways

Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke below the slight upward trend line. The support level is at around 3,900.



Conclusion

The S&P 500 index extended its Monday’s decline yesterday on ongoing recession and inflation worries. The market retraced its recent advances, but we may see a short-term or intraday upward correction at some point. Investors will be waiting for Friday’s PPI release, the next week’s Tuesday’s CPI release and Wednesday’s FOMC release.

Here’s the breakdown:

• S&P 500 index broke below the 4,000 level and extended its Monday’s decline yesterday.

• We may see a rebound today, but the market reversed its short-term uptrend.

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Paul Rejczak,

Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
* * * * *
The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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