- The market has been trading inside a bullish channel since November 2024 ; The long-term trend was then bullish.
- More recently, the latest batch of solid macro data underlying the resiliency of the US Economy, and with the latest CPI report topping expectations, investors have scaled back their hopes of a quick dovish switch from the FED.
This led to a decreased appetite for riskier assets such as stocks, bringing the S&P500 to a lateral consolidation following a new all-time high below 5,282pts.
The DMI indicator clearly shows a less and less directional price action, dominated by a bearish pressure.
The RSI indicator is now evolving in selling zone, following a bearish divergence with the market.
- Both macro and technical signs are now aligned, tending to support the case for a market correction.
Increased monetary uncertainty combined with high stock valuation usually brings investors to readjust their exposure to risk, and this is what we are seeing here.
Even if the market still trade inside the 5,116pts/5,282pts range, the rounding top chart pattern can be seen as much more threatening for the short to mid-term outlook.
If the market were to break the 5,116pts support level, it would pave the way to a much deeper correction towards 5,000pts, 4,830pts, 4,690pts and even lower.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
- More recently, the latest batch of solid macro data underlying the resiliency of the US Economy, and with the latest CPI report topping expectations, investors have scaled back their hopes of a quick dovish switch from the FED.
This led to a decreased appetite for riskier assets such as stocks, bringing the S&P500 to a lateral consolidation following a new all-time high below 5,282pts.
The DMI indicator clearly shows a less and less directional price action, dominated by a bearish pressure.
The RSI indicator is now evolving in selling zone, following a bearish divergence with the market.
- Both macro and technical signs are now aligned, tending to support the case for a market correction.
Increased monetary uncertainty combined with high stock valuation usually brings investors to readjust their exposure to risk, and this is what we are seeing here.
Even if the market still trade inside the 5,116pts/5,282pts range, the rounding top chart pattern can be seen as much more threatening for the short to mid-term outlook.
If the market were to break the 5,116pts support level, it would pave the way to a much deeper correction towards 5,000pts, 4,830pts, 4,690pts and even lower.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.