Market Analysis: S&P 500 Declines in August after 5 Consecutive Months of Gains

<img src="https://fxopen.com/blog/en/content/images/2023/09/sp500.jpg" alt="Market Analysis: S&amp;P 500 Declines in August after 5 Consecutive Months of Gains" /><p>According to statistics over the past 25 years, the average growth of the S&amp;P 500 index is 7.8% per year. But from the beginning of 2023 to August 1, the index rose by about 19%, so a noticeable correction in size was overdue.</p><p>The decline from August 1st to the month&apos;s low was about 2/3 of the previous rise — a perfectly acceptable proportion to blow off steam from the market, which was indicated by the RSI overbought in July (while forming a divergence pattern warning that the rally has exhausted ).</p><p>An important result of the summer was that analysts in the media began to mention the recession scenario less and less – market participants believe in a “soft landing” and that the Fed is controlling the situation with high inflation, given the alarming signals from the labor market.</p><figure><img src="https://fxopen.com/blog/en/content/images/2023/09/12.png" alt="Market Analysis: S&amp;P 500 Declines in August after 5 Consecutive Months of Gains" loading="lazy" width="2000" height="1099" srcset="https://fxopen.com/blog/en/content/images/size/w600/2023/09/12.png 600w, https://fxopen.com/blog/en/content/images/size/w1000/2023/09/12.png 1000w, https://fxopen.com/blog/en/content/images/size/w1600/2023/09/12.png 1600w, https://fxopen.com/blog/en/content/images/size/w2400/2023/09/12.png 2400w" sizes="(min-width: 720px) 720px" /></figure><p>What will happen in autumn? Traditionally, these are months of high volatility, with the S&amp;P 500 having chances to try to hit a new high for the year after a correction that appears to have formed in August. This is indicated by bullish facts from the chart:</p><p>→ The price of the S&amp;P 500 has found support at the lower boundary of the parallel channel.<br>→ The price rebounded from the support level of 4,340.<br>→ The price is above significant levels 4,388 and 4,465.<br>→ The price has broken the bearish trend line (shown in red).<br>→ The price may consolidate near the median line of the channel, where supply and demand may balance each other in total before the September Fed meeting.</p>