the sp 500 closed up 066 on thursday after opening lower in reaction to us federal reserve chair jerome powells speech at the cato institute monetary conference whether or not the recent bounce is the start of another bull cycle or the bounce before another leg down won’t be known for some time however on wednesday sentimentrader took to twitter to post sentiments “sometimes theres a chart that just blows your hair back in 22 years of doing this none stand out like this one” the veteran trader with 228400 followers said the chart is a visual of the putcall ratio for last week demonstrating that an immense amount of hedging took place in fact 81 billion worth of put options or bets that stock prices will fall were purchased compared to less than 1 billion in calls “this is 3x more extreme than 2008” sentimentrader added concerns of a looming recession hit in late 2021 after inflation began to soar the federal reserve turned hawkish tightened its policy and implemented a series of steep interest rate hikes although cpi data from the labor department for the month of july showed inflation may have peaked powell’s speech at the jackson hole symposium stoked fears that another 075 interest rate raise may be in the cards for september this launched the market into chaos see also 150b hedge fund manager stocks may fall 25 if fed keeps raising rates institutional traders loading puts may be betting that when cpi data for the month of august is released on sept 13 it will show the fed’s battle to lower inflation is far from over when the fed meets on sept 20 and 21 the cpi data will be used to determine the stance it takes in determining the percentage at which they hike rates which options traders may feel bearish toward seasoned traders will have learned that when the market is looking one way it’s often wise to look in the other direction however patience may be required before taking either a bullish or bearish position in the markets the technical perspective the sp 500 hinted at a bear market in midmarch when the 50day simple moving average sma crossed below the 200day sma creating a death cross which made bullish traders grow cautious on june 13 when the etf fell more than 20 off its alltime high the bear market officially took hold between june 17 and aug 16 a bull cycle occurred in the general markets which caused the sp 500 to soar by almost 19 many technical traders although expecting a bounce were surprised at the strength of the bullish action the first clue that the market would take a turn for the worse came on aug 16 when the etf attempted to regain the 200day sma as support and failed between that date and tuesday the sp 500 retraced over 10 before beginning to bounce on wednesday see also the biggest risks for business in 2022 according to 700 execs within every bear cycle bounces to the upside occur and bullish periods take place for traders and investors the periods when individual stocks move antitrend can be confusing because it’s difficult to decipher whether moves to the upside are a temporary bounce or whether the bear cycle is ending and a bull cycle is about to begin the bullish end to thursday’s price action in the general markets may hint that at least a larger bounce is on the horizon especially if the sp 500 can regain the 50day sma as support