stockmarket bears maintained the upper hand last week with the sp 500 finishing friday below a crucial chart support level that has technical analysts warning of a potential test of its june lows “over the last three years the level on the sp 500 with the most amount of volume traded has been 3900 it closed below that on friday for the first time since july 18 which in our view opens the door down to the june lows” near 3640 said jonathan krinsky chief market technician at btig in a sunday note see chart below the sp 500 spx ended friday at 387333 falling 07 in the session and 48 for the week for its lowest close since july 18 that left the index up 57 from its june 16 closing low of 366677 the sp 500 logged an intraday low for the selloff at 363687 on june 17 according to factset the dow jones industrial average djia fell 41 last week to end friday at 3082242 while the nasdaq composite comp saw a 55 weekly drop to 1144840 a move back to the june lows likely won’t be a straight line krinsky wrote but the lack so far of discernible “panic” in the cboe volatility index vix futures curve and the lack of a drop to more extreme oversold conditions as measured by monthly relative strength index don’t bode well he said other analysts have noted the lack of a sharper rise in the spot vix often referred to as wall street’s “fear gauge” the optionsbased vix ended friday at 2630 after trading as high as 2842 above its longterm average near 20 but well below panic levels often seen near market bottoms above 40 stocks had bounced back sharply from the june lows which had seen the sp 500 down 236 from its jan 3 record finish at 479656 krinsky and other chart watchers had noted the sp 500 in august completed a morethan50 retracement of its fall from the january high to the june low a move that in the past had not been followed by a new low krinsky at the time had warned however against chasing the bounce writing on aug 11 that the “tactical riskreward looks poor to us here” michael kramer founder of mott capital management had warned in a note last week that a close below 3900 would set up a test of support at 3835 “where the next big gap to fill in the market rests” stocks fell sharply last week after a tuesday reading on the august consumerprice index showed inflation running hotter than expected the data cemented expectations for the federal reserve to deliver another supersize 75basispoint or 075percentagepoint rise in the fedfunds rate with some traders and analysts penciling in a 100basispoint hike when policy makers complete a twoday meeting on wednesday preview the fed is ready to tell us how much ‘pain’ the economy will suffer it still won’t hint at recession though the market’s bounce off its june lows came as some investors had grown more confident in a goldilocks scenario in which the fed’s policy tightening would wring out inflation in relatively short order for bulls the hope was that the fed would be able to “pivot” away from rate increases averting a recession stubborn inflation readings have left investors to raise expectations for where they think rates will top out heightening fears of a recession or sharp slowdown aggressive tightening by other major central banks has stoked fears of a broad global slowdown see can the fed tame inflation without crushing the stock market what investors need to know hear from ray dalio at the best new ideas in money festival on sept 21 and sept 22 in new york the hedgefund pioneer has strong views on where the economy is headed