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While benchmarking S&P500 Although the index has consistently defied gravity, it is not exempt from the golden rule that what goes up must eventually come down. In fact, her psychologically significant 5,000 point level loss may be more than just a radar bounce. Rather, it increases the likelihood of a stock market crash.
On the technical side, Lawrence G. McMillan, president of McMillan Analysis, warned of the collapse of the support line. According to an article published by market watch, its S&P 500 peers are below the support line set at 5,050 points. “That would be a game-changer for the investment landscape,” the Investment Products Trading Advisor wrote. Mr McMillan added:
“The 5,050-5,180 area was a strong foundation for new all-time highs in late March. Therefore, the sell-off that started with the CPI numbers two weeks ago and continues due to geopolitical concerns is why the market The fact that we haven’t been able to stop the flow is important. Once we broke through that 5,050 area, there was a pretty intense technical sell-off.”
The expert noted that the index ended below 5,050 for the second consecutive day on April 18th. Therefore, this situation has officially dissolved its “core” bullish position. It doesn’t necessarily coincide with a stock market crash, but the odds are stacked against you.
Concerning fundamentals highlight the possibility of a stock market crash
Certainly, the technical situation reflects the underlying context, but it doesn’t seem convincing either. In particular, escalating tensions in the Middle East could lead to events that could cause a stock market crash.
Last weekend, Iran launched a barrage of missiles and drones against Israel. Government officials claimed that Iran did so in response to the bombing of the Iranian consulate in Syria, an attack aimed at Israel. There are reports that Israel has struck back against Iran, raising concerns that stock prices will plummet again.
as wall street journal The scope of Israel’s response was reportedly “narrow.” Importantly, Iranian media has downplayed the incident, suggesting both sides want to de-escalate tensions. however, WSJ It has been pointed out that the miscalculation could spill over into broader regional conflicts.
Such a miscalculation could disrupt global oil supplies. This could affect inflation and trigger a stock market crash.
Complicating matters is that energy prices are contributing to higher-than-expected inflation. And that could have a downwind effect on consumer sentiment.content streaming giant Netflix (NASDAQ:NFLX) became the first large-capitalized technology company to report earnings. Unfortunately, the weak earnings outlook for the current quarter caused the stock to drop significantly.
why is it important
The still challenging inflation environment also clouds the Federal Reserve’s monetary policy goal of lowering interest rates.Subsequently, several popular growth-oriented technology companies including: super microcomputer (NASDAQ:SMCI) and Nvidia (NASDAQ:NVDA) I had a hard time. Again, this is not evidence of a stock market crash, but the wind is not blowing in the right direction.
Publication date, Josh Enomoto did not have any positions (directly or indirectly) in any securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.
