Technical analyst Carter Price of Cornerstone Macro mentioned he expects additional declines after Friday’s inventory market drop.
Price pointed to a trendline from the market’s lows in 2016 that shares have since examined and held above. To succeed in that line, Price mentioned, the S&P 500 must fall 222 factors, or 7.7 % from its all-time excessive hit final Friday of two,872.87.
“That may be a very cheap factor to, I’d say, wager on,” Price mentioned Friday on CNBC’s “Quick Cash.” “Whether or not it occurs Monday or whether or not it occurs over time, or whether or not it takes a very long time, I believe we are able to make an assumption that an intermediate excessive was made.”
A 222-point decline within the S&P 500 would take the benchmark index to 2,650.87, four % under Friday’s shut.
The S&P 500 dropped greater than 2 % Friday in its worst day since September 2016 as Treasury yields rose and merchants fearful about rates of interest rising too shortly. The U.S. 10-year Treasury yield hit a excessive of two.854 %, its highest stage since Jan. 23, 2014.
“I believe the speed factor will not be a giant deal. I believe individuals know that it was overdone. It was excessively steep, they usually’ll use any purpose to promote and level to it,” Price mentioned. “The true fact is banks did not act effectively and that was presupposed to occur when charges [rise].”