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S&P 500 flirts with bearish market area and these ETFs are there for the flight


May 14, 2022
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In spite of gains early in Friday’s trading, the S&P 500 ( SP500) stays near to bear market area for 2022. This has actually put exchange traded funds connected to the crucial U.S. equity index in focus, such as iShares Core S&P 500 ETF ( NYSEARCA: IVV), Lead S&P 500 ETF ( NYSEARCA: VOO) and SPDR S&P 500 Trust ETF ( NYSEARCA: SPY).

These ETFs discover themselves down 17% in 2022 and reached a year-to-date decrease as high as 19.2% on Thursday– exceptionally near to specifying a bearish market.

Normally, a bearish market is specified as a 20% drop over a specific amount of time. On a year-to-date basis, marking from the S&P 500’s closing level on the last day of 2021, a 20% fall would take the index to about 3,813.

On The Other Hand, the S&P 500 struck a record intraday high of 4,818.62 on Jan. 4. A 20% drop from that point would take the index to about 3,855. On Thursday, the S&P struck an intraday low of 3,858.87– within a couple of points of reaching a 20% slide from its peak.

Nevertheless a financier selects to determine it, the S&P has actually come precariously near to bear-market area. With a sharp rebound in Friday’s early trading, the possibility of breaking listed below that barrier in the instant term has actually decreased. Still, with current market volatility and with severe headwinds staying, the possibility remains that another market slide might rest on the horizon.

After all, the S&P 500 is still on speed to close lower for the 6th straight week in a row. The index is down 12.5% over that six-week duration.

As danger and unpredictability levels stay raised, financiers might wish to move their attention towards ETFs that intend to provide financiers security versus bearish market losses with inverted S&P 500 funds. See examples listed below:

The ProShares Short S&P 500 ( SH) is +16.7% YTD. Furthermore, its 2X and 3X leveraged bro and sis funds are up even higher. The ProShares UltraShort S&P 500 ( SDS) and ProShares UltraPro Short S&P 500 ( SPXU) are up 33.1% and 49.6% in 2022.

Furthermore, see listed below a five-year weekly chart of the S&P 500 as it approaches bearish market area. In addition, see more analysis on IVV, VOO, SPY, SPXU, SDS, and SH.

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