BTIG technical strategist Jonathan Krinsky said in a note published Sunday that the S&P 500 is showing technical characteristics of an index on the verge of a sizable directional move as market volatility grows more compressed.
Krinsky pointed to the index's weekly Bollinger Bands, a commonly used metric for measuring price compression, which he noted are currently the tightest they have been since 2019. That degree of constriction historically precedes a pronounced move away from the prevailing range.
Importantly, Krinsky emphasized that the pattern itself does not indicate which way the market will break. Nonetheless, BTIG retains an upside bias. The firm argues the broader trend remains bullish and that it is uncommon for markets to suffer the same type of large decline in back-to-back years, supporting a tilt toward higher prices.
Krinsky added a specific technical threshold: a sustained advance beyond the 7,000 level on the S&P 500 could point to a subsequent target in the vicinity of 7,200 in the months ahead.
On sector and style positioning, the strategist noted a potential near-term tactical opportunity in large-cap growth stocks. Many mega-cap names and growth-focused ETFs have retreated toward their rising 200-day moving averages and, in Krinsky's view, have held that support, which may offer entry points for shorter-term trades even as the longer-term picture continues to favor small-cap value.
At the same time, Krinsky flagged software stocks as a potential vulnerability for the market as a whole if they fail to mount a convincing rebound from recent weakness. That specific area could represent a downside risk to broader equity performance.
Note: The technical observations described are based on the strategist's weekly Bollinger Bands and related trend assessments and do not guarantee a specific outcome or timing of market moves.