The S&P 500 has tumbled as Jerome Powell abruptly takes away the punch bowl and geopolitical tensions mount. But there could be signs of prices nearing a bottom – at least for now.
The main pattern on today’s chart is the descending channel along the highs of January and March, plus the lows of February and May. Prices closed back at that line on Monday.
Second, the index has returned to the 3984 area where it consolidated before breaking out in March 2021. Can old resistance become new support?
Third, the zigzagging decline may now represent an A-B-C correction nearing its completion.
The 10-year Treasury yield is another potentially important chart because its surge this year has hammered the Nasdaq and growth stocks. TNX is now close to the 3.25 percent level where it peaked in October 2018. If this area holds as resistance, it could ease some of the pain in equities:
Recent sessions have also brought signs of the inflationary trend slowing. Metals and fertilizers have mostly declined in the last two weeks, while crude oil is under pressure. Less upward pressure in commodities could also calm anxieties about a 1970s-style crisis.
It’s still early overall, but some potential positives are emerging. Will buyers take over this month and turn the old saying on its head?
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
The main pattern on today’s chart is the descending channel along the highs of January and March, plus the lows of February and May. Prices closed back at that line on Monday.
Second, the index has returned to the 3984 area where it consolidated before breaking out in March 2021. Can old resistance become new support?
Third, the zigzagging decline may now represent an A-B-C correction nearing its completion.
The 10-year Treasury yield is another potentially important chart because its surge this year has hammered the Nasdaq and growth stocks. TNX is now close to the 3.25 percent level where it peaked in October 2018. If this area holds as resistance, it could ease some of the pain in equities:
Recent sessions have also brought signs of the inflationary trend slowing. Metals and fertilizers have mostly declined in the last two weeks, while crude oil is under pressure. Less upward pressure in commodities could also calm anxieties about a 1970s-style crisis.
It’s still early overall, but some potential positives are emerging. Will buyers take over this month and turn the old saying on its head?
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
