Heroism fueled or not, the S&P 500 level is destined for another test of lows. These are the levels to watch, says this strategist

In the words of the great Bonnie Tyler: “It has to be safe, and it has to be soon, and it has to be larger than life.” The hero this market is waiting for is Fed Chairman Jerome Powell and he speaks on Friday, so it’s soon. Whether he is sure remains the question.

“The speculation is so hot ahead of his remarks that it seems even subtle shifts in intonation could make a difference in jittery markets,” notes Russ Mould, AJ Bell’s chief investment officer.

Our call of the day of the founder and managing partner of Fairland Strategies, Katie Stockton, has her eyes on bearish signals for the S&P 500, Fed heroics or not.

It signals near-term oversold conditions in higher-growth areas of the market that could help stocks rebound in the coming days, especially on well-received comments from the Fed. “We want to use these relief rallies, which we view as bear market relief rallies, as opportunities to reduce exposure to avoid the next downdraft,” she said in an interview with real vision Wednesday.

Stockton reviewed some technical indicators she was watching. For example, she sees signs of a long-term downtrend in the S&P’s 200-day moving average, a popular short-term momentum gauge, which recently turned into a sell signal.

Fairland Strategies

“Even if we were to see the S&P 500
SPX,
+0.29%

inch above that 200-day moving average, that wouldn’t change for us. We say this because the long-term setup is still very difficult,” Stockton said.

She also notes that the years 2008 to 2009 and 2000 to 2002 “saw retest after retest of this oversold territory,” meaning a bottom for stocks will be a process, she warns.

“I think the hope that there’s already a v-bottom in place is really just that – the hope – because that’s what we got used to during the corrective phases, but actually , we think it’s something more than that,” Stockton said.

Stockton is watching a support level taken from a Fibonacci retracement level – horizontal lines that indicate possible support and resistance – around 3,815.

“Now if that level is broken, then we feel there’s really significant downside risk at around 3,200, which is the secondary Fibonacci retracement level. We don’t rule that out under this scenario. “But 3,815 is the key support for our work. And we expect it to eventually be retested,” the strategist said.

She said utilities and energy are all that’s left in the stock market for the long term. His company recently launched the Fairlead Tactical Sector ETF
NAIL,
+0.08%
,
who is exposed to these sectors, risk assets, short-term treasury bills, long-term treasury bills and gold – a very bearish positioning.

The steps

Equity Futures
ES00,
+0.43%

YM00,
+0.07%

NQ00,
+0.65%

rise, while Treasury yields
TMUBMUSD10Y,
3.102%

TMUBMUSD02Y,
3.367%

plunge and the dollar
DXY,
-0.08%

tilts to the south, which raises gold
GC00,
+0.66%
.
Oil
CL.1,
+0.34%

BRN00,
+0.70%

is flat.

The buzz

Upcoming Dollar Tree Results
LTRD,
-0.08%
,
General dollar
CEO,
-0.06%

and large lots
BIG,
-3.67%

can offer clues about consumer belt-tightening. Platoon
PTON,
+20.36%

shares plunged after disappointing outlook and losses more than $1 billion in the quarter.

Nvidia
NVDA,
+0.24%

Shares fell after a cautious outlook from the graphics chip maker. Here’s what analysts are saying. Here’s also what the CFO tells MarketWatch about this difficult quarter.

Selling power
RCMP,
+2.28%

collapses after cloud software group pledges billions in buyouts, but reduce your forecast and missed orientation expectations. Snowflake Data Software Group
SNOW,
+4.19%

is booming on better earnings news.

from Tesla
TSLA,
+0.22%

the three-for-one stock split takes effect Thursday. Stocks are up, but nnot everyone is excited.

GDP fell a revised 0.6% in the second quarter and jobless claims fell to a one-month low of 243,000. The Jackson Hole rally kicks off Thursday, but we’ll have to wait until Friday to hear from Powell from the Fed.

China added another $146 billion in stimulus to its struggling economy, this time focusing on infrastructure.

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Best Tickers

Here are the most searched tickers on MarketWatch as of 6 a.m. EST:

Teleprinter

Security Name

TSLA,
+0.22%

You’re here

BBBY,
+18.00%

Bed bath and beyond

EMG,
-3.07%

GameStop

CMA,
+0.21%

AMC Entertainment

MONKEY,
+1.57%

AMC Preferred Holdings

NVDA,
+0.24%

Nvidia

AAPL,
+0.18%

Apple

NIO,
+3.17%

NIO

AMZN,
+0.13%

Amazon

BBY,
-1.53%

best buy

Table

“Copper looks more bullish and could be the metal of choice for a more meaningful transition towards the end of the year,” says Mark Newton, head of technical strategy at Fundstrat, in a note to clients.

A “significant lift-off from July lows despite less-than-stellar economic data” marks a technically bullish move that should take copper near 380-386 in the near term, the strategist said. “Then, after a slight pullback in September, I expect a much more significant rally which should test the spring highs of 2022.”

He likes to buy Freeport McMoRan
FCX,
-1.48%

on the dips at the end of September as well as on the copper-themed ETFs.

Fundstrat

Random plays

Don’t hit him – wedding cake from Walmart.

Tourist arrested after a moped cruise through the ancient ruins of Pompeii.

‘Magic Mushrooms’ on the first line of alcoholism.

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