Technicals | May 03 2022
By Michael Gable
Last week, we had flagged the possibility of an "inverse head and shoulders" pattern on the S&P500 Index, which would have been bullish. Weakness since then has now thrown that possibility out the window. Instead, we now have the index making new lows for the year. The trigger for the next move will be the Fed Reserve interest rate decision on Wednesday in the US.
With almost everyone becoming more and more bearish on rates, we need to be mindful that a relief rally is a real possibility. We can't predict the future, but with the S&P500 Index down here, we either see a nice rebound from Thursday onwards, or a capitulation to lower levels (as we saw in December 2018).
The S&P 500 Index is literally on the edge of a cliff here, with it now sitting at some major support.
In terms of stocks this week, we have a chart on BHP Group ((BHP)).