The stock rally that started way back in March of 2009 is looking a little winded.
The Standard & Poor’s 500 Index and Dow Jones Industrial Average are down 3.4% and 4.3%, respectively, as of April 2.
Then there’s this red flag: The S&P 500 Index has fallen below its 200-day moving average, for the first time since June 2016.
Technical analysts and chart watchers believe that’s a major negative turning point.
If so, that would push the S&P 500 to around 14 percent below its January record.
Even more troubling has been the selloff in tech stocks that have played an outsized role supporting the rally.
Tumbling bond yields may also reflect a shift out of stocks into fixed income assets in my view.
Yields have slumped in recent trading sessions.
The current bull market is one of the most enduring in financial history.
However, if the S&P 500 Index falls 20% from its last high in January, it may all come to a crashing halt. And if that happens, we would be officially in a bear market.
That’s far from certain to be sure. Yet there’s no question, in my opinion, the rally looks wobbly heading into April.
- Xavier Brenner has covered global market, business and economic trends for Interactive Brokers Asset Management since 2013. An experienced financial journalist, Brenner offers analysis and insights on the stories that matter to the discerning investor.