BTIG’s Jonathan Krinsky believes that the S&P 500 is now closer to 3,400-3,500 than 4,200 after yesterday’s price action.
The S&P 500 fell 4.04%, Nasdaq lost 4.73% while the Dow Jones closed 3.57% lower in another bloodbath. The trigger was Target's (NYSE:TGT) shocking earnings report that sent shares 25% lower.
“There's not much else to say about today's action other than it was a bloodbath,” Krinsky told clients after market close.
He said investors are taking cash out of the market, instead of rotating between sectors.
“We had thought a counter-trend rally to 4,200 would make sense, but given today's action, our conviction that the SPX tests 3,400-3,500 before this is over is now higher than our conviction for a rally to 4,200. While it won't be a straight line, today is confirmation that selling rallies in bear markets is much easier than buying dips,” he added.
By Senad Karaahmetovic