Market Forecaster Jim Bianco Says S&P 500 Reversed 9 Times In Last 7 Trading Days: A Look At Crucial Levels

Market forecaster Jim Bianco, president and Macro Strategist at Bianco Research, pointed out that the S&P 500's movement over the last week has shown a lot of reversals.

What Happened: Bianco's comments came in the backdrop of a positive day for the markets. On Thursday, major Wall Street indices closed in the green. The SPDR S&P 500 ETF Trust SPY closed 0.78% while the Invesco QQQ Trust Series 1 QQQ gained 0.83%.

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"The S&P has reversed nine times in the last seven trading days. Today’s rally is less than 50% of the previous two days," Bianco tweeted, adding that investors should not over-read into the intra-day moves too much.

"The real question is how long until the 10th reversal?" Bianco said.

The S&P 500 has moved in the range between 4,018 and 3,928 over the last seven trading sessions. Bianco cited a tweet by an analyst that questioned the positive move of the index on a day when treasury yields were shooting higher.

The 10-year Treasury yield breached the 4% mark this week for the first time since November, led by fears of persistent rate hikes and lingering inflation. The iShares 20 Plus Year Treasury Bond ETF TLT closed 0.89% lower on Thursday while the Vanguard Total Bond Market Index Fund ETF BND lost 0.21%.

Why It Matters: What needs to be seen is whether the small gain made on Thursday is another dead cat bounce or will the market find a support at a time when Federal Reserve officials are continuing to sound hawkish ahead of the central bank's policy meet this month. Rising treasury yields, in current times, have not been too positive for the market.

Options expiring on March 10 indicate the S&P 500 index is seeing a strong resistance at the 4,000 level as is indicated by the open interest build-up on the out-of-the-money Call strikes. The index is has a strong support at the 3,950 level, options data show. S&P 500 closed at 3,981.35 on Thursday.

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