The market just slipped through what JPMorgan's Jason Hunter calls a "fork in the road" - only this time, it's more like tumbling through a black hole. Hunter says the recent U.S. trade policy surprise pushed the S&P 500 index below a critical level near 5500, triggering what could be an accelerated pricing of recession risks.
Key Support Breached - Now What?
Hunter highlights that the S&P 500 didn't just tiptoe past support - it gapped straight through 5500, dipped through the mid-5300s and now hovers near a major support zone in the low 5100s.
He believes a bounce is possible from here, but don't bet the house on it. "We suspect the market can stage a bear market rebound... but believe that lift will be contained and potentially short-lived unless the news flow sees a dramatic change," he warns.
The Yield Curve Has Its Own Drama
In the bond world, the 2-year Treasury note flirted with resistance at 3.48%-3.55% before backing off. Hunter now sees a ceiling at 3.825%-3.85%, but expects an eventual bullish breakout - translation: yields may start rising again soon.
How To Play It
For those looking to trade this technical twist, ETFs like the SPDR S&P 500 ETF
The bottom line?
The S&P 500 just slipped past a critical technical threshold, and while a short bounce may lure some in, Hunter's charts are flashing caution. Don't mistake this for a reset - it's more likely the eye of the storm.
