S&P 500 Echoing Bearish Vibe at All-Time Highs!

Following a surprise beat from Friday’s non-farm payrolls, the S&P 500 concluded the first trading week of the year on the back foot and snapped a nine-week winning streak. Attention now shifts to Thursday’s US CPI inflation release at 1:30 pm GMT.

Technical Landscape Favours Bears, at Least in the Short Term

Unquestionably, the market average has exhibited a clear-cut uptrend since breaking out north in 2013 on the monthly chart. And we are fast approaching the all-time high (ATH) of 4,818, with obvious support calling for attention as far south as 4,102.

Meanwhile, out of the weekly chart, you will note that the unit has pencilled in what many technical analysts would refer to as an Evening Star candlestick formation: a bearish cue. Although this timeframe also demonstrates a clear uptrend (alongside the monthly chart), the bearish candlestick formation, together with resistance at 4,743 and negative divergence from the Relative Strength Index (RSI), echoes a downside bias that directs focus to support coming in at 4,595.

The daily timeframe, although also trending northbound, recently manoeuvred south of support from 4,725 and is, as of writing, testing the grip beneath the level as a possible resistance. This is a move shining the technical headlights on daily support from 4,653, and a break under here would expose daily support from 4,578 (set just beneath weekly support mentioned above at 4,595).

Direction?

Under weekly and daily resistance between 4,743 and 4,725, respectively, short to medium-term direction favours bears at the moment. Daily support at 4,653 serves as a logical downside target, though overwhelming bids here opens the door for further underperformance towards weekly support from 4,595.

Charts: TradingView

DISCLAIMER:

The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.