Where's the Market Bottom? S&P Analysis

The market is currently in a correction (bear market on Dow). Analysis of the daily S&P provides some insight into the market's eventual bottom.

The length of the swing is a gauge of price momentum. The first swing off the February highs fell -16%, while the 2nd swing down is clearly longer and fell -21%. This reflects increasing downside momentum and suggests another swing down can be anticipated in the future.

 

For the S&P 500, my current outlook is for a potential retest of the 2018 low (2346), but since trends tend to move in 3 legs, I would not be surprised to see a rebound before a final, 3rd swing down. If we get the retracement upward (bounce), the target would be the 10-SMA. This is a very fluid, volatile market environment, so anything can happen, but this is my framework for today.

 

When the correction finally ends, there are going to be some awesome buying opportunities. Something is needed to turn sentiment more bullish, and that may come in the form of a Fed stimulus (meeting next week of FOMC).