Frank Cappelleri, Chief Market Technician at Instinet, highlights the major downside targets for the S&P 500.
Now the 200-week moving average has been breached, Cappelleri thinks there is little hope of an immediate change to the bearish trend. He says the next downside target for the S&P is 2,320, which comes from a lopsided head-and-shoulders pattern (Chart 1). Only a rally that recaptures the 2,850 zone would negate this.
The S&P has also breached its 11 year uptrend line (Chart 2). Despite being punctured on previous occasions, Cappelleri points out that each visit to this trendline provided a trampoline back to new highs. This time has been different and in Chart 3 he plots the Fibonacci retracements of the 2009 to 2020 advance, which are now possible targets for the end of this panic phase (Chart 4).