SPX breaks trend but will rally hold?

20 Jul 2022

We have seen the first significant bullish reversal sign in ages with the S&P breaking its bearish trend line. It still needs to repair a lot of damage, but this is a good sign. It needs to hold above 3920 now in order to keep the bulls happy, otherwise this will be considered a false breakout. Next resistance is seen around 4080, the base of the previous breakdown. I think there is scope for further upside, but I am not sure how high the index will rise until the next wave of selling starts, given a bearish macro backdrop. So it is essential to trade these markets from level to next level, and move on to next opportunity.

By]Fawad Razaqzada on behalf of FOREX.com