S&P 500 could rally to 4270 but bottom outlook remains bearish
In the event of a rebound, the S&P 500 could climb back to its former March support at 4150 points, or even the neckline of the head and shoulders reversal pattern formed at the start of the year at 4270 points.
However, even if the S&P 500 rebounds, the bottom outlook would remain bearish. Indeed, the economic slowdown combined with monetary tightening constitutes a negative environment for risky assets which should persist in the months to come.
The market should resume a fundamental uptrend when the US economy reaccelerates or when the Fed ends its monetary tightening.
Entrance: Purchase at between 3850 and 3900 points
Stop: 3800 points
Objective: 4270 points
Risk/reward ratio: >3
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