SPX500, 4H Chart: Potential Double bottom forming in SPX
SPX is forming a potential double bottom pattern as it approaches the neckline after a half-month retracement. What are the chances of a breakout?
Since November 2023, the SPX has been on an uptrend. Despite interest rates remaining high at 5.5%, the excitement surrounding AI and tech stocks has kept the market buoyant. However, recent days have seen a market drop due to a slowdown in carry trade activities. The rise in interest rates in Japan and the potential for US interest rates to drop have prompted funds to withdraw from US stock markets and repay Japanese loans.
While the SPX is nearing a critical juncture, the market conditions may not be ideal for a breakout. This skepticism is heightened by the impending earnings reports, with a significant chance that results may fall below expectations.
In the short term, the double bottom pattern may form and reach its target if it breaks the neckline. However, in the mid-term, it is too early to confirm a sustained rise. The broader market sentiment, influenced by macroeconomic factors and earnings performance, suggests that the SPX might still face challenges before a definitive upward trend can be established.
As always, do your research and proceed with caution. This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, any loss of profit which may arise directly or indirectly from the use of or reliance on such information.
Since November 2023, the SPX has been on an uptrend. Despite interest rates remaining high at 5.5%, the excitement surrounding AI and tech stocks has kept the market buoyant. However, recent days have seen a market drop due to a slowdown in carry trade activities. The rise in interest rates in Japan and the potential for US interest rates to drop have prompted funds to withdraw from US stock markets and repay Japanese loans.
While the SPX is nearing a critical juncture, the market conditions may not be ideal for a breakout. This skepticism is heightened by the impending earnings reports, with a significant chance that results may fall below expectations.
In the short term, the double bottom pattern may form and reach its target if it breaks the neckline. However, in the mid-term, it is too early to confirm a sustained rise. The broader market sentiment, influenced by macroeconomic factors and earnings performance, suggests that the SPX might still face challenges before a definitive upward trend can be established.
As always, do your research and proceed with caution. This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, any loss of profit which may arise directly or indirectly from the use of or reliance on such information.
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