S&P 500 Gives Up Early Gains for the Week

Weekly Technical Analysis of the S&P 500

The S&P 500 attempted to rise early in the trading week, but ultimately gave up gains just below the 50 Week EMA. As a result, the market formed an inverted hammer, and if we break below the bottom of the candlestick, we will almost certainly test the 4000 level. The 4000 level is a massive, round, psychologically important number that people should pay great attention to, and if we go below it, we'll most likely fall much farther.

In the end, the S&P 500 seems to be set to drop, but we must first break through all of that support. You might even argue that there is a pseudo-head and shoulders pattern, but at the end of the day, what counts is that there is a great deal of bearish pressure and dread.

If the market can turn around and break over the top of the inverted hammer for the week, the market is likely to move above 4500. The 4500 level has historically witnessed selling pressure, and it might be a target. All things considered, I believe this is a market that will continue to be quite boisterous, prompting concerns about interest rate rises and economic slowdown.

As we continue to witness possible stagflation, I believe you should see rallies as potential selling chances on shorter-term charts, and understand that a break below this week's lows might trigger a longer-term selling opportunity.