[Platinum Insights] How Low can the Market go? what level might S&P500 bounce back?

Stock futures are flat this morning as the market struggles to find traction. Adding to the gloomy outlook, even the Bank of Japan, known for its ultra-accommodate monetary stance, took the first steps into normalizing policy. 

In a surprise move overnight, the BoJ announced that it would allow the 10-year bond yield to move 50 bps either way of its 0% target instead of the 25-bps range. On the corporate side, General Mills dropped over 1% in premarket trading despite reporting better-than-expected profit and revenue for its latest quarter and offering some strong guidance.  

Crude oil and the 10-year treasury yield are up this morning. Gold bounced back above the $1,800 per ounce mark, closing in on its highest level since July, as concerns about a global recession and inflation becoming even more entrenched boosted demand for the precious metal. 

At the same time, uncertainty about the Fed’s interest path and mounting evidence that the US is heading for a recession in 2023 sent the dollar sharply lower, making gold the preferred safe-haven asset.  

Today’s economic reports include Building Permits and Housing Starts, and tomorrow is the Consumer Confidence Index.  

The S&P 500 – SPX closed down for the 4th day in a row. Usually, we can expect a price action retracement back to resistance which would be the 50-day SMA at 3867 or Gap resistance at 3958. There is also a gap to be filled at 3995 if the market gets really aggressive. 

Our indicators are all negative so there is a possibility the price action trend could remain negative as they move closer to an oversold condition. Expect bearish trends to continue until we can close and keep price action above the 200-day SMA and the long-term bearish line. 

Have a Great day!  This information is provided for educational purposes only and is not a recommendation to buy or sell a security.