Market Charts – February 22/22
The S&P 500 on Tuesday fell into a correction for the first time in two years, joining the Nasdaq Composite, as Russia sent troops into pro-Russian regions in Ukraine.
The S&P 500 index SPX, closed at 4,304.76, below the correction level at 4,316.91, which would represent a 10% drop from its Jan. 3 record close. A correction is commonly defined by market technicians as a fall of at least 10% (but not greater than 20%) from a recent peak.
The last time the S&P 500 entered a correction was Feb. 27, 2020, when the market was being whipsawed by fears about the outbreak of the COVID pandemic.
This time around, investors were wrestling with escalating tensions between Moscow and Kyiv, which could devolve into a full-blown war. Wall Street also was wrangling with a surge in inflation and a Federal Reserve that is bent on hiking interest rates to combat growing pricing pressures, which, incidentally, could be exacerbated by Ukraine-Russia tensions.
The S&P 500 closed right at our initial near-term support level at 4300, which is below the January low. As we have been warning for the last month, the next level of support is 4200, and if that level is breached, we could be in for a significant correction.
The Nasdaq was down 1.23% today and is now down ~17% since the November high.
Gold was up 7.60 and managed to close above 1900. A bit surprised it didn’t do better given Russia’s escalation with Ukraine
Stay tuned!
