Bank of America Warns S&P 500 Could Fall 6% to 6,850 Through Q3
Updated
Updated · Business Insider · Jun 28
Bank of America Warns S&P 500 Could Fall 6% to 6,850 Through Q3
3 articles · Updated · Business Insider · Jun 28
Summary
Bank of America said the S&P 500 is entering a summer corrective phase that could unfold in three waves through the third quarter, with a worst-case drop to 6,850 from around current levels.
Three technical signals drove the warning: weakening momentum with the 14-day RSI near 49, a TD Sequential "red 13" exhaustion reading on June 1, and a possible Elliott Wave fourth-wave low around 7,334.
BofA said any marginal new high near 7,741 could become a bull trap, while a break below 7,334 would strengthen the case that the correction is already underway in a sideways-to-lower pattern.
The bank still expects stocks to recover in the fourth quarter, potentially ending the year with a Santa rally despite near-term volatility.
Broader doubts about the bull market have grown as chip shares cool: the Nasdaq 100 fell about 4% for the week, with Broadcom down 10%, Nvidia 8% and Intel 7%.