With the Federal Reserve meeting this week, stocks could be volatile, and technical analysts say the S & P 500 looks increasingly set for a retest — and possible break — of its June low. Stock charts have seen a lot of damage recently, and some technical strategists are becoming more pessimistic in the near-term. In the past week, the S & P 500 declined 4.8%, closing at 3,873, in its worst weekly performance since June. “We’ve sided with a higher low in the S & P 500, and believe a ‘less intense’ lower low has become more likely following rollovers in select mega-cap stocks,” writes Oppenheimer’s Ari Wald this weekend. “The crux of our view is that mega-cap weakness is masking improving breadth which we think bottomed in June.” Wald now says a dip to 3,500 on the S & P 500 is possible. That is the 50% bull market retracement. His previous expectation of a near-term low point was 3,800. Weakness in stocks like Alphabet, NVIDIA and Microsoft helped change his view. Stocks could be volatile again this week, with the Federal Reserve meeting Tuesday and Wednesday. The Fed is expected to raise its target fed funds rate by another 75 basis points Wednesday and also provide new forecasts on the economy, inflation and interest rates. A basis point equals 0.01 of a percentage point. “Significant seasonal headwinds in September suggest the market is vulnerable going into next week’s FOMC decision,” noted Wald. The analyst, however, continues to believe the market will bottom in October and then rally in the fourth quarter, in line with its typical behavior in mid-term election years. Jonathan Krinsky, chief market technician at BTIG, said the 3,900 level was important and the area on the S & P 500 where the most volume traded over the last three years. “It closed below that on Friday, which opens the door down to the June lows,” Krinsky wrote in a note. The June low was 3,636. Krinksy also points to weakness in the charts of big cap tech – Apple, Microsoft , Alphabet and Amazon. “They might be giants. But some of the biggest marquee names in the market continue to look vulnerable to us here,” Krinsky added. In mid-term election years, the typically negative month of September has been a time of weakness, into October. Mark Newton, Fundstrat global head of technical strategy, said the market turned lower right on schedule in the past week, confirming seasonal bearishness. “While one cannot rule out a 1-2 day bounce attempt given this week’s decline, I do not expect much strength until prices have reached support under 3,700 in October,” Newton wrote. “Tactically, ‘cash remains king’ and one should be patient until markets reach downside targets, and begin to show either volume and breadth divergences, or capitulation to buy.” Stocks had been higher heading into last Tuesday’s report of August consumer inflation. The consumer price index for August was up 0.1% instead of falling 0.1%, as expected by economists. That kicked off a new round of higher expectations for Federal Reserve interest rate hikes in the central bank’s fight against inflation. Wald said the market is still trading on the view that the Fed needs to pivot from its rate hiking policies in order for stocks to bottom. “Overall, while volatility is likely to linger into next month’s CPI print, market conditions are developing to support such a turn in Q4, based on our read of the tape,” he wrote. The Oppenheimer technical analyst notes that the S & P 500 has typically bottomed around Oct. 9, before launching into a strong rally into year-end, based on the average composite of the last eight mid-term election years. “This suggests the next CPI release (Oct. 13th) could act as a potential catalyst, should it provide flexibility for Fed policy. Overall, we maintain our view that market behavior suggests a base is forming, and volatility is at risk to linger until seasonal headwinds become tailwinds,” Wald wrote.