SPX - How far can it drop?S&P broke down from it's weekly broadening "pennant" decisively last week after Powell gave another blow to the markets ("don't fight the FED" resonated with a resounding punch to the hopeful bulls, ouch!).
It is now near June's low (point C) and pretty oversold in the near term. Hence a short bounce from here is possible but there is likely a lot less conviction for a sustainable bounce this time.
Should we break June's low in the coming days, then the next support is around 3400-3500 where we have a conflucence of:
1. 50% fib retracementand of the major AB swing up and
2. 127% fib extension of the recent CD swing up
However, I won't rule out a worst case scenario where market might not bottom until around 3200 where we have a conflucence of:
1. 61.8% fib retracement of the major AB swing up and
2. 161.8% fib extension of the recent CD swing up
3. horizontal resistence turned support @ 3200
This is just a technical prediction and by no means guaranteed. The market is fluid and Economic situations (& Powell) could change along the way and until we see a clearer sign that the bottom could be in, it is safer not to catch a falling knife unless one is an asttute short term trader or an ultra long term investor.
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
