S&P500: Has Risk Appetite Hit An Inflection Point? [Video]

This week we've seen both CAD/JPY and USD/JPY stall at resistance clusters so, with S&P500 also stopping at a pivotal level, it suggests risk sentiment may have approached an inflection point.

We can see on the daily chart that the S&P500 has rallied no less than 10% in just nine trading sessions since the 2346.58 low. Whilst bears may be rubbing their hands with glee, it's worth noting that a large rebound within a decline is typically seen within a bear market meaning new lows cannot be ruled out. Indeed, the rally which lead to the spinning top Doji at 2800 paved the way for a 16% decline over 14 session throughout December. Moreover, the daily trend structure remains firmly bearish.

S&P500

Taking a closer look at the candles, the two recent sessions have closed with a hanging man reversal and spinning top doji. That we've seen reversal candles beneath a resistance zone shows a hesitancy to push higher and brings the potential for a swing high to form.

Of course, near-term momentum remains firmly bullish, so we we'd want to see evidence of price topping out or a firm rejection of the 2600 before anticipating that a swing high is in place. But, if bearish momentum is to return, we can assume the bearish trend has resumed and gun for the 2443.96 and 2346.58 lows.

This research is for informational purposes and should not be construed as personal advice. Trading any financial market involves risk. Trading on leverage involves risk of losses greater than deposits.