Does The Dip In The S&P500 Indicate A New Downtrend Or Just A Pullback?

Christian Tharp, CMT from T3 Live joined Benzinga's Premarket Prep team to talk about the recent pullback in the market.

Transcript

00:00Does this dip in the S&P 500 like indicate a new trend to the downside versus just a pullback?

00:06I mean right now it looks just looking at the chart

00:09Like a pretty similar pullback that we saw like you mentioned back in April then we ended up moving higher from there

00:15What cues would you be looking for that? Like, okay, this is gonna be a sustained downtrend now

00:20The trend has shifted versus no, we're still in this bullish channel. This is just a pullback as we often see

00:27Gotcha always the million-dollar question, right? Yep

00:31Exactly. So you go back what we're watching multiple levels on the way down

00:36You know, certainly we always have to pay attention to things like the 200-day moving average

00:40We have to pay attention to things like that

00:41I tend to focus more on price itself that whole price is king mentality

00:46And so as of right now having broken out of that channel again, unless the market sends me a message

00:52Otherwise it did so at the same time. It was it had weakening momentum on the way up

00:57So it was kind of saying hey, look, we've had a great run since April

01:00Let's take some healthy profits when you look at what happened in the market and you look at that rotation

01:05It looks like a healthy overall bull rotation. So I wouldn't think no matter how wherever this terminates

01:11I wouldn't think it's putting the bull market in jeopardy in any way

01:14End of July ish tends to be seasonally can be a little weaker. So seems to be normal right now

01:21You start breaking things like the high you just mentioned from the previous pullback, I think it was five six seven percent back there

01:28Right around that you can call it 50 to 50 area from that old high

01:32You know from that where we pulled back there

01:34I wouldn't want to see us fall back below that that would be a little bit of a concern to me certainly

01:4110% is that psychological mark for the market? So I wouldn't want to see things like that get down. Otherwise

01:47We are simply looking this is a nice. Hey, look at that nice great three month plus run

01:52You can't go up forever. It's healthy seeing a little rotation

01:57But areas we wouldn't want to see again as you look at that old peak from back in the April area

02:01I wouldn't want to go back below that and there are other trend lines that we're watching

02:05But right now I wouldn't make a big deal out of it