Wall Street's biggest bear is standing by his call for stocks to slump 10% by January. Here are 4 charts that support his point.

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Joseph Adinolfi is a markets reporter at MarketWatch.

One of Wall Street’s biggest bears is standing by his call for the S&P 500 index to finish 2023 at 3,900. That would represent a more than 10% drop from current levels.

Technical factors also played into his reasoning. Wilson noted that the S&P 500 appears “stuck” between two key support and resistance levels: it’s 50-day moving average at roughly 4,420 and its 200-day moving average at roughly 4,240. “Our sense from speaking with investors is that a majority still believe a 4Q rally is more likely than not. While that confidence level may have waned a bit this past week, many are still leaning more long than they would like to reduce the probability of missing out in a year in which narrow mega cap strength has driven benchmarks,” Wilson said.

To wit, the average S&P 500 stock is down year-to-date based on the performance of the equal-weighted S&P 500 index. The equal-weighted index also recently endured a “death cross” as its 50-day moving average dipped below its 200-day moving average, signaling that momentum could continue to carry it lower.

 

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