S&P 500: Shooting star + bearish divergence RSI
The trading session on December 13 was full of important technical signals for the S&P 500 index (
US500).
After the release of a lower-than-expected
US CPI in November (7.1% vs. 7.3% expected and down from 7.7% in October), the SPX surged to 4,137 points; however, the price action reversed sharply following sellers' profit-taking on the good news and in anticipation of the significant risk posed by tomorrow's FOMC meeting.
The Fed might save hawkish surprises that are not currently priced in by the market, which has factored in a terminal rate of 4.8% in May 2023 and more than 50 basis points of cuts in the second quarter of the year.
Technically speaking, we are seeing key signs that can indicate that the bear market rebound has peaked here and lacks the conviction to continue further gains.
A shooting-star candlestick has formed on the daily chart, which might imply that the short-term trend is about to reverse. A bearish divergence RSI signal, further supports the November bull trend reversal theory, as the oscillator failed to update new highs when prices did.
Additionally, the S&P 500's positive price action was unable to surpass the critical 50% Fibonacci retracement of the 2022 low to high, indicating that the major bearish trend is still in place.
Hawkish shocks from tomorrow's FOMC meeting might cause the SPX to retest support at 3,900 points, with the 50-day moving average (3,860) functioning as the next target.
US500).After the release of a lower-than-expected
US CPI in November (7.1% vs. 7.3% expected and down from 7.7% in October), the SPX surged to 4,137 points; however, the price action reversed sharply following sellers' profit-taking on the good news and in anticipation of the significant risk posed by tomorrow's FOMC meeting.The Fed might save hawkish surprises that are not currently priced in by the market, which has factored in a terminal rate of 4.8% in May 2023 and more than 50 basis points of cuts in the second quarter of the year.
Technically speaking, we are seeing key signs that can indicate that the bear market rebound has peaked here and lacks the conviction to continue further gains.
A shooting-star candlestick has formed on the daily chart, which might imply that the short-term trend is about to reverse. A bearish divergence RSI signal, further supports the November bull trend reversal theory, as the oscillator failed to update new highs when prices did.
Additionally, the S&P 500's positive price action was unable to surpass the critical 50% Fibonacci retracement of the 2022 low to high, indicating that the major bearish trend is still in place.
Hawkish shocks from tomorrow's FOMC meeting might cause the SPX to retest support at 3,900 points, with the 50-day moving average (3,860) functioning as the next target.
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