Stock market checklist close to meeting all bottom conditions (NYSEARCA: Spy)

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The stock market is 70% of the way to the bottom, according to Oppenheimer’s technical analysis team.

Regarding our bottom market checklist, 7 out of 10 indicators have reached the “minimum” thresholds, but are not as deeply extreme as years like 2009 or 2020, “analyst Ari Wald said in a note.

The three remaining for triggering are peak-to-lowest duration, five months on target of seven, NYSE net new 52-week highs at -648 with targets of 1,000 and 10-day average put / call at 0.98 with a target greater than 1.

“For the levels, we are seeing a 50% adjustment to the S&P 500 (SP500) (NYSEARCA:Spy) 2020-22 progresses to 3500, “said Wald.” S&P also hit an 18-month low last week. “

“While we use this as our definition of a bearish rule rather than a signal, the stock cycle rose in 2016, 2018 and 2020 as S&P hit an 18-month low.

Looking at the market performance after an increase of 75 basis points in the interest rate of federal funds, the forward return “was below average according to our analysis, although we found that the worst performance occurred when the FF rate exceeded 10%,” Wald said. . “Better representing the current conditions, the forward return was closer to the average for the whole period, when the FF rate was below 10% (currently 1.75%).”

“We do not believe that last week’s sale after the campaign should also be considered significant,” he added. Think of the last time the Fed rose by at least 75 basis points on November 15, 1994: S&P fell 4 percent the following week, built a base for another two weeks, and then rose sharply in 1995.

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