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BTIG's Krinsky Sees 'Some Evidence of Capitulation' as S&P 500 Nears 200-WMA Below 3600

Stock Markets Sep 26, 2022 07:36
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By Senad Karaahmetovic 

Jonathan Krinsky, BTIG's Chief Market Technician, believes that fears about the long-term implications of current macro headwinds on markets are justified. More recently, Krinsky warned the firm's clients that the S&P 500 is poised to drop below 3900 after the index completed a head-and-shoulders pattern.

As the S&P 500 trades below 3700 in pre-open trading on Monday, Krinsky says "we are much closer to a tradable bottom than we were at 3,900."

"While there will be some talk of a double bottom at the June lows, an undercut that gets closer to the 200- Week Moving Average makes sense to us," Krinsky wrote in a note.

Below the 200-WMA, which comes close to 3590 this week, the next big support for the S&P 500 is around 3400, or pre-COVID highs. The "tradeable bottom" could be a result of some metrics showing early evidence of capitulation, Krinsky added.

"One of the metrics lacking capitulation was NYSE downside volume as a percentage of total volume. On a 20-day basis, it is now above 60% which is the start of the capitulation threshold."

For equities to bottom, Krinsky once again warned that the U.S. dollar needs to "at least pause."

BTIG's Krinsky Sees 'Some Evidence of Capitulation' as S&P 500 Nears 200-WMA Below 3600
 

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