The chart you see in this analysis is a weekly chart of the S&P 500. Currently, the price is creating its fourth bearish candle in a row, which means that we’re very close to having 4 consecutive bearish weeks. We’re getting close and waiting for the close of a weekly candle on Friday. The last time it happened was in September 2020 and after that, the price bounced and went higher. So, what can we expect now?
The long-term situation doesn’t look particularly optimistic here. The SP500 created a massive head and shoulders pattern (blue). The most recent drop was put the finishing touches on the right shoulder.
What’s left is to break the neckline (green) and that can actually be a challenge. The struggle may come from the fact that apart from the neckline, it’s also a 23,6% Fibonacci and also a genuine support in general, which first showed how effective it was in the middle of 2021 (orange).
The SP500 breaking that support and closing a weekly candle below the green line will be a massive, long-term sell signal. As long as the price stays above that point there’s still hope. Selling while the price is still above the major supports is not the best idea, it’s generally believed that one should wait for the breakout first. As long as we stay above, buyers can look for an occasion to bounce, however for that to happen we need to see some upward momentum, which is currently absent. What’s left is to wait. The shape and color of this week’s candle should be a great help and give us a hint about future movements.
Trading FX/CFDs on margin bears a high level of risk, and may not be suitable for all investors. Before deciding to trade FX/CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. You can sustain significant loss.
Recommended content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.