The market started dropping after the S&P 500 topped at the price of $6,166 on 2/19/2025. On this date on 3/28/2025, the S&P 500 is quoted at $5,580 and dropped approximately 10% from the all-time high. If the S&P 500 dropped greater than 10%, Wall Street considers it as a correction. Now we can officially call it "correction", its price is in the correction territory.
Since the end of February, I have made several posts bringing the market movements to your attention,
2/17/2025 - The Market Is Still Warm
3/3/2025 - End To Begin
3/28/2025 - Who Is Sheep?
because many economic recession indicators I rely on showed that we could be in a recession anytime. Well, technically, these indicators have been telling us to be cautious since 2023, so this is not really helpful. It may be it is for a long time for investors, however, I would like to narrow it down further to the point of a specific time frame either daily, weekly, or maybe monthly scale, but not yearly. Now, the Time Principle recently indicated that there is a chance that the S&P 500 topped around November or December when it hit the price of $600. Price-wise, it was exactly 800 % return from the bottom price of $670 in 2009 after the great recession. I took the price for a big turnaround point and have been monitoring it closely ever since.
One of the most reliable indicators is T10Y2Y, whenever the difference between the 10-Year Treasury and 2-Year Treasury becomes 0, it indicates that the U.S. economy would experience a recession. This was also introduced in the blog (The Market Is Still Warm) three weeks ago and I briefly addressed the opinion that this indicator may not be accurate this time, though historical records contradictly indicated a recession has almost always been true since 1933. Now I can tell you with confidence that the T10Y2Y indicator is probably correct for this time as well.
The question is "How far the S&P 500 is going to drop ?"
My prediction is that there is a chance that it is going to drop down to $4,900, which is approximately a 20% drop from the all-time high of $6,166, which is the territory of the BEAR market. I doubt that it is going to drop further than that at this time. So if it happens, that is the best entry point (strong resistant price) to buy stocks. As far as I can tell, for now, the price will drop further than $5,580.