Hoping to profit from risk-off flows lately?
Banking sector jitters are back at it again, and it doesn’t help that traders are also feeling wary about a potential U.S. recession.
If this kind of market mood persists, we might just see more declines for risk assets like equities.
In that case, the S&P500 index could have more room to head south, possibly sustaining the bearish momentum until its triangle support.
S&P 500 Index (SPX500) 4-hour Chart by TradingView
As you can see from the 4-hour chart above, the stock index has been forming higher lows since late last year and has encountered resistance near 4,150.
Now that’s an ascending triangle pattern right there!
Now the ceiling is holding once again, forcing price to set its sights back down on the triangle support, which seems to be right around the 4,000 mark.
Bearish vibes could stay in play if risk aversion extends its stay in the financial markets, but any sign of relief could spur a bounce soon.
Technical indicators are suggesting that support levels are more likely to hold than to break. The 100 SMA is above the 200 SMA, with the latter possibly holding as dynamic support nearby.
Also, Stochastic is in the oversold region to reflect exhaustion among sellers, so turning higher would mean that bullish pressure could return.
If that’s the case, watch out for a potential bounce back to the triangle top that’s close to the 100 SMA dynamic inflection point.
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