MW Why the S&P 500 could drop to 6,000 before it reaches a fresh record high
By Barbara Kollmeyer
Investors still need to see a complete washout before the index can start moving back toward record highs
Investors should not expect a comeback for stocks right now, says Jonathan Krinsky.
For investors hoping that this year's stock-market pullback has already reached its nadir, BTIG's Jonathan Krinsky has some bad news.
The S&P 500 likely still has some "unfinished business" to the downside before it can manage a return to record highs, according to Krinsky, who is chief market technician at BTIG. He described the current stock market as "very unusual" in a note to clients shared with MarketWatch on Sunday.
He started with the fact that the S&P 500's SPX relative strength index, or RSI - which measures the magnitude of losses over a recent period against the magnitude of gains - dropped to under 30 last week. Falling below that bar technically indicates oversold conditions, and the index fell below that level last Monday, according to Dow Jones Market Data.
Following that, the S&P 500 rallied more than 4% over the next two days, but Krinsky pointed out that during the past 20 years, such action has only been seen 13 times when the RSI dipped below 30. And only once - on Jan. 31, 2022 - did such a two-day rebound begin with more than 30% of the index's components above their 200-day moving average, he said.
The bottom line is that many investors are looking past Middle East tensions, assuming stocks will swiftly return to prior highs, but "the reality is we are lacking the fully oversold conditions that typically accompany a breach of the 200 DMA," he said.
He also noted that over the past 20 years, the S&P 500 has never spent 10 straight trading days below its 200-day moving average while being 7% away from a 52-week high. That phenomenon stretched to 11 days as of last Thursday. He said the closest analogues to this setup are November 2007 and December 2015, and meaningful downside followed after each of these examples.
What's more, the shorter-term 20-day moving average has fully crossed below the 200-day, he said. "Short and medium-term trends are down while the long-term trend is now questionable," Krinsky said. "We continue to see downside risk towards [6,000 to 6,150] as long as we remain below 6,800."
The S&P 500 was trading slightly higher at 6,600 early Monday, narrowing its year-to-date loss to about 3.4%. However, the index was still down by around 5.6% from its most recent record high of 6,978.60, reached on Jan. 27.
Looking across sectors, the strategist said consumer-facing stocks were experiencing trouble, noting weakness in equal-weight discretionary stocks. He said the Invesco S&P 500 Equal Weight Consumer Discretionary exchange-traded fund RSPD was hovering near multiyear lows relative to the equal-weight S&P 500 XX:SP500EW.
Nor does the strategist believe crude-oil prices have finished climbing yet. A chart of Brent crude (BRN00) shows multiweek consolidation before the next leg higher, he noted, which would target $130 a barrel next.
-Barbara Kollmeyer
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(END) Dow Jones Newswires
April 06, 2026 11:27 ET (15:27 GMT)
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