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.

“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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