Fairlead Strategies founder Katie Stockton said Wednesday that the S & P 500 could plunge as low as 3,200 before bottoming in the most calamitous outcome for the market. The worst-case scenario is about 3,200. That’s because the secondary level of below 3,500. This is based upon a crucial Fibonacci level of retracement. … So that to me seems like a natural place for this to end,” Stockton said on CNBC’s ” Squawk Box .” She added, “But we are vocal if there is downside exhaustion of a long-term nature.” The market has been agitated by volatility in all three major indexes this year due to inflation, Russia’s invasion Ukraine, and Covid worries. Investor fears about the Federal Reserve raising interest rates and an uncertain earnings season has prompted large sell-offs in recent weeks. The market is anticipating the Fed’s policy notes, which were expected to be released at its meeting this month. All major indices saw modest gains by Wednesday mid-morning. Minutes of the meeting by the central bank are expected to be released at 2 pm. ET. Stockton stated that the market is a “cyclical bull” inside a secular bull. Stockton stated that the cyclical bear can still be triggered by an oversold bounce. Based on the indicators, we are hoping for a possible bottom in September or October. She said that she hoped to find signs of a long-term bottom, but they are not yet there.
