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BTIG strategists believe it is still premature to consider last week’s low of 3,491 as the bottom for this downcycle.
Many conditions are still lacking for the bottom to develop near these levels, they added. As such, the firm’s strategists reiterated their view that the S&P 500 will hit 3400 “later this month.”
“With many conditions still lacking, we continue to think 3,400 is likely later this month, and we can’t rule out an overshoot towards 3,250 which is where more meaningful volume-based support lies,” the strategists told clients in a note.
If the downtrend is to break, at a minimum the bulls must recapture the 20-DMA at 3962. Finally, they expect small-cap value stocks to outperform large-cap growth, a theme that “will grow as we head into 2023.”
“For now, it’s a relative call, but if things do stabilize, small-cap value should do well,” they added.
The S&P 500 opened the new trading week by trading 1.5% higher.
