The US stock market is trapped in a "storm," and has yet to hit bottom?

According to Zhitong Finance APP, this week, the US stock market experienced a storm. The tension caused by tariff issues reached a peak, with the S&P 500 index significantly declining, briefly falling below key technical support levels. Affected by a series of tariff news, investor confidence was shaken, and this benchmark index is expected to record its largest weekly decline in six months. On Thursday, the S&P 500 index fell by 1.8%. For the first time since November 2023, the index broke below the 200-day moving average, briefly piercing this key support level. The last time this happened, the stock market rebounded within a few days. However, the severe fluctuations in the market this time may obscure the signals that traders attempt to glean from this brief breakout. Jonathan Krinsky, Chief Market Technician at BTIG, stated, "Although the stock market may rebound from this key support level, we may not have seen the true bottom yet." Krinsky suggested closely monitoring the Cboe Volatility Index (Cboe VIX Index), the overall signals from the options market, and the market's overall reaction to news related to trade, the economy, and the development of artificial intelligence to determine whether the market has bottomed. As a measure of market volatility, the VIX has risen to its highest level since mid-December last year. Additionally, the latest data from Bespoke Investment Group shows that the current intraday volatility of the stock market is at the 98th percentile of all readings since the company began tracking in 1983. In other words, only 2% of the time has the market experienced higher volatility than the current level. Krinsky added that this week's severe fluctuations are "part of a market correction, and the two are complementary." Currently, the S&P 500 index has fallen 6.6% from its all-time high reached on February 19. If it drops 10% from this historical peak, from a technical perspective, the stock market will enter a correction zone. Over the past two years, technology stocks have been the biggest driver of the S&P 500 index's rise, and now the weakness of tech stocks is drawing attention. However, the market's bearish sentiment may be more widespread. Earlier this week, the proportion of S&P 500 constituent stocks trading above their 200-day moving average fell to about 50%, the lowest level since November 2023. Meanwhile, investors' risk appetite has sharply declined, flocking to relatively safe assets for refuge. Among all sectors of the S&P 500 index, healthcare and consumer staples have performed the best this year. In contrast, two baskets of indices compiled by Goldman Sachs, which include unprofitable tech companies and heavily shorted stocks, have suffered a sharp decline. JC O'Hara, Chief Technical Strategist at Roth Capital Partners, stated, "The market seems to be showing a stronger defensive posture. Market participants are closely watching the US government's policy agenda, but this is not something they can easily predict."