The S&P 500 (^GSPC) is forming a bottom, says one technical analysis expert.
“It’s always precarious at the end of a bear market, a market that’s trying to transition from bearish to bullish, as it were. And our call and our charts continue to suggest that that’s exactly what’s going on here, that the S&P is forming a bottom,” Rich Ross, Evercore ISI senior managing director of technical analysis, told Yahoo Finance Live.
S&P 500 had a massive 4% down day earlier in the week. The S&P closed below 3,900 on Thursday, and Friday it was headed even lower.
“Keep in mind, we’ve been spoiled technically in recent years that we’ve had these V bottom reversals after sharp declines, as we saw in February, March 2020, with the pandemic plunge, as it were, and again in 2018, with that Powell rookie mistake where we just sort of stuck our cleat in the turf and pivoted back in the other direction,” said Ross.
“This is more of a traditional bottom in the absence of that proverbial Fed put. But it’s a bottom, to be sure,” he added.
S&P 500 heavy weight Apple (AAPL) is down about 16% year to date, outperforming the broader market. On Friday the tech giant’s stock was hovering below the $150 level.
“There’s 7% of the S&P that I don’t worry about when I go to bed each night, and that’s Apple computer,” said Ross, who believes the tech giant could reach a new high in 2023.
“That $150 [per share] key line in the sand there, again, I think we do hold that $150, and Apple gets back on its horse. I think Apple pushes out to a new high in Q1 next year,” he added.
“And if 7% of the S&P can make a new all-time high both relatively and absolutely in a bear market, that’s a pretty good starting point for a bearish to bullish reversal in the broad market,” he added.
Ines is a markets reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre