S&P 500 Slump Threatens JPMorgan Chartist's Bull Case for Stocks

(Bloomberg) -- This week’s equity decline has sent the S&P 500 toward levels that JPMorgan’s technical analyst Jason Hunter says put his bullish case “under pressure.

The benchmark index for stocks fell as low as 2,639.97 Friday, approaching the 2,610-2,637 range that Hunter said is “important for the health of the developing recovery” that the market has experienced since the February selloff. He has predicted that the S&P 500 would climb to new highs in the second quarter based on expectations that these levels would hold, as they did during the market’s pullback in early March.

S&P 500 Slump Threatens JPMorgan Chartist's Bull Case for Stocks

“While we still view that as the most probable outcome and do not envision a material break below support in the mid-2,500s over the medium term, we suggest maintaining risk-management discipline and would reduce exposure on a break below 2,610,” Hunter wrote in a note to clients.

The S&P 500 was up 0.2 percent as of 10:10 a.m. in New York, trimming its weekly loss to 3.7 percent. Stocks are poised for a second week of declines as Facebook Inc. led a slump in technology stocks and trade tensions escalates between the U.S. and China.

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