Right now, it’s grim out there…
Outside of inflation at 40-year highs, the economy is slowing. More people are losing their jobs. And for those who work, paychecks aren’t keeping up with higher prices. More and more people are putting everyday purchases on credit cards. Many folks are taking on part-time work just to make ends meet.
The war in Eastern Europe is devastating the families and lives of the Ukrainian and Russian people. It’s also crimping the lives and economies of European countries.
Home prices have leveled off and have even begun to fall slightly. The cost to buy a home has more than doubled from a year ago — the average 30-year fixed-rate mortgage rate is darn near 7%.
In the markets, folks have seen retirement accounts and brokerage accounts tumble. All three major U.S. indexes have revisited their June lows and are firmly in bear market territory. The S&P 500 is down 23% this year.
It isn’t pretty. And there’s plenty of concern to go around.
Look Out Below?
In just a minute, I want to share a potential little bright spot of information. In fact, it could signal light at the end of the tunnel. But first, I want to check in on price volume levels for the S&P 500.
As a refresher, volume profiles show us trading volume at various price points and provide basic support and resistance levels. The longer the bar, the more action takes place, which means you can typically expect those levels to hold. The shorter the bar, the less volume there is. You’ll see prices move quickly through those levels since fewer buyers and sellers are willing to make a deal.
By closely watching price volume for the S&P (as well as a couple of other technical indicators), I’ve been warning readers that the rally we had back in July and August wasn’t likely to hold.
So let’s back check in to see what happened…