Technical Analysis | The current US stock market may still be a "bear market rebound"

11 months ago, the S&P 500 index was 14% below its 200-day moving average, and currently it is 7% above the 200-day moving average.

11 months ago, after CPI data showed higher-than-expected inflation, the S&P 500 index began to rebound from a cyclical bottom.

Jonathan Krinsky, Chief Market Technician at BTIG, said that a similar trend is unlikely to occur after the data is released on Wednesday.

According to FactSet data, in October 2022, the S&P 500 index hit a bottom of 3577 points. Since then, the S&P 500 index has risen by 25%.

Krinsky said that 11 months ago, the S&P 500 index was 14% below the 200-day moving average, while currently the index is 7% above the 200-day moving average.

However, Krinsky pointed out that as of Wednesday, only 48% of the S&P 500 index constituents were above the 200-day moving average, which is far below the historical average, indicating limited market breadth.

Krinsky noted that since 1990,

"The current situation is either the slowest/weakest start to a new bull market we have seen, or one of the longest/strongest bear market rebounds we have seen," said Krinsky. He added, "We are more inclined towards the latter and expect today's CPI to not bring about the same results as 11 months ago."

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