S&P 500 drops, then rises. Is a low nearby?

The S&P 500 can usually go against the bad news, particularly when it is just one or two negative catalysts.
But, when the breeze initiates to gather, geopolitical turbulence, raging inflation, and an aggressive Fed, the stock market can actually fight.

In order to fight determinedly high inflation, the Fed has commenced a rate-hiking spree. That has launched the U.S. dollar higher, about 20% in the year.

The morning’s inflation report sent shockwaves to the stock market as the S&P 500 struck the low of this year. After that, investors turned about and sent stocks booming higher. After that type of whipsaw, it is worth questioning that where the low may be.

The right time to buy S&P 500

Taking the technical part into account, we are ultimately getting the flush down to the 3,500 regions in the S&P 500 and $350 in the SPDR S&P 500ETF.

In June, we stated, “if this isn’t low and we trade down 3,795, may be in the next month or in coming months, then we have to acknowledge the chance that 3,400 to 3,500 is in game. There, we will find a group of levels that should back the S&P 500.”

But it did take many months, but here we are into a group of possible back regions.

As we are slightly low from the 200-week moving average, there is also the 50-month moving average in-game, the 50% throwback from the all-time high low to the covid low in March 2020, and the main eruption level of about $350.

At Thursday’s low, the S&P 500 was low, almost 27.5% from the highs.

For a few long-term investors, this is sufficient of a reduction to initiate assigning some funds to the S&P 500. For traders, this main backing level is a feasible risk/reward spot to enhance their long exposure.

If it keeps, I want to witness the SPY claim back the June down about $362, then potentially make a push to the collapsing 10-week shifting average of about $375. If support is unsuccessful in keeping, the pre-covid high comes to play at about $339, after the $325 to $318 zone, the latter of which keeps the 61.8% retracement.

We also need to witness short-term yields stop operating to the upside as the two, and ten-year Treasury yields strike a new 2022 high today.

Another actuality is that in the last 60 years, a bearish market along with downturn wills to strike the S&P 500 to the tune of ~36%. As that is reportedly just an average, we are still remarkably short of that initiation, and it is something to not forget.

After that, as one can initiate making a case for some long allotments, one can’t suitably account for a black-swan event.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing