A recession is coming. What to expect from the S&P500?

As you know, CPI (Consumer Price Index in the US) for September is due out today. Naturally, a lot will depend on it. Predicting how decent the numbers will be or not, I do not undertake. But, quite possibly, everything will not be completely tragic.

I expect this week the maximum fall (perhaps in the next day or two) to the level of 3480-3520 for the S&P500. Moreover, to be honest, I think that the fall may be limited to the levels of 3540-3550. But a lot will depend on CPI, and on many additional factors. The market now objectively looks oversold.

The question for me is only one: is it worth waiting for a little panic and proudly closing safety positions on it, or is this not destined to come true? Panic is usually a specific and understandable signal for a reversal.

For me now the main task is to clearly understand at what point you should roll over. I think there is a good chance of seeing a rebound in the markets for a while. To what level? So far it’s hard to say. But I do not rule out that we will still see 3850-3900 on the S&P500.

By the way, this does not change the fact that by the end of the year the market may fall again very strongly. Even up to the level of 3200-3400. I do not rule out such a scenario by the end of November this year.

Now everything is going according to the scenario that I described back in July. However, despite the overall rather pessimistic forecast, I believe that at the end of the year we will again see a more positive market.

What is the reason for this? Yes, I just expect that, under the pressure of global negativity and, as a result, a weakening labor market, the Fed will decide to somewhat reduce the intensity of the fight against inflation. The only question is: when will this happen? My bet is the beginning of December.