S&P 500 Resumes Rebound After Stumble; So Has It Truly Bottomed Out?

 | Aug 11, 2022 10:38AM ET

The softer-than-expected US CPI print for July has kickstarted the stalled rally on Wall Street, intensifying the bullish bets that the 6-month downtrend is over. The S&P 500 has been plotting an upward course over the past seven weeks, but the rebound hit a wall at its 100-period moving average (both in the daily and weekly timeframes), generating some disappointment that this was just another bear market bounce rather than a genuine trend reversal. However, if the inflationary picture continues to improve, the latest recovery may prove more meaningful.

Finally, it’s easy to forget how Wall Street managed to scale the heights that it did in the post-pandemic world. Now that the excess liquidity is slowly being drained from the financial system and the era of rock-bottom borrowing costs is well and truly over, there’s a danger that buyers will think twice as soon as valuations hit exorbitant levels again, casting doubt on the prospects of the S&P 500 beating its all-time high of 4,818.62 in the foreseeable future.
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Written By: XM Group

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