Global markets are turning lower
$S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$
In the first week of 2024, major U.S. indices turned to the downside. Year-to-date, the $NASDAQ 100(NDX)$ declined by about 2.2%, the S&P 500 by 1%, the $DJIA(.DJI)$ by 0.3%, and the Russell 2000 by 3%.
The situation is no better overseas, where in the Chinese market, major indices also slipped lower. In particular, the $HSI(HSI)$ lost about 5.3%, the CSI 300 lost 3.7%, and the Shanghai Composite Index lost 3%.
The same story also played out in Europe, where the DAX declined by about 1.7%, the UK100 by 0.8%, and the French CAC40 by 2.3%. On top of that, Europe saw a reacceleration of inflation, putting much anticipation on these numbers in the U.S. that are scheduled for release on Thursday.
If inflation is also reaccelerating in the U.S., it will likely put pressure on the FED to keep conditions tight for longer than expected. As a result, this can lead to repricing in the markets.
Now, on the subject of technicals, there is a divergence between the price and RSI on the weekly graph. Simultaneously, the RSI is peaking below 70 points, which is a bearish sign. As for the daily chart, all RSI, MACD, and Stochastic continue to develop bearish structures, tilting the odds toward more weakness.
Consequently, we will monitor the resistance near $4,700; if the price fails to regain ground above it (with at least two consecutive closes above it), it will be concerning.
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