Jun. 30 at 1:52 AM
BofA's chief technical strategist Paul Ciana warned that the S&P 500 could face a three-phase correction over the summer after surging nearly 17% from its March lows. According to Ciana, the rally has begun to lose momentum since the index reached its latest peak in early June, with price action appearing increasingly stretched and volatility rising. He recommends a defensive positioning from July through September as the risk of a broader pullback grows.
Ciana identified key support levels at 7,200, 7,025 and 6,850, with the lowest target implying a decline of roughly 7.6% from current levels. He also warned that even if the S&P 500 climbs to a fresh high around 7,741, the move could turn out to be a false breakout rather than the start of another sustained rally. Looking further ahead, he said a longer correction lasting into October, potentially forming a double-dip pattern, remains one of the market's main risks.
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