We are currently witnessing the continuation of the growing trend in the stock and crypto market. Positive news about the slowdown in inflation caused a change in sentiment in global markets. However, it is necessary to cool down and realize that a correction can still take prices lower than we saw last time.
US consumer prices rose at the fastest monthly rate in 17 years in June. Subsequently, in July, for the first time in the last 2 years, they did not grow at all. The S&P 500 index therefore reacted positively and at the time of writing it is trading at a level 4,210 dollars. However, it is close to strong resistance where a trend reversal may occur.
S&P 500 price. Source: TradingView
S&P 500 is headed for resistance
The market price is heading for resistance at roughly $4,270. This is the intersection of resistance, which consists of correction maximums and is long-term decreasing. It’s about resistance which is horizontal, and in the past served as support. Thus, the result is a strong resistance area, which can represent the formation of a corrective leg for the price.
In the event that the price will decrease in the short term, it is necessary to monitor the formation of the next bottom. In the long term, we need this for the S&P 500 to form higher local minimum last at $3,650. A potential reversal pattern would thus form.
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