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S&P500: The bears are back in town

The S&P500 attempted to rally on Friday with the bulls falling again at the 1420 level. The shooting start that was formed on the daily chart suggests a bearish outlook in the market. At 1418 this morning, it looks like the bears have the upper hand and with the fiscal cliff talks in the US being the main headline risk, we expect the market to go lower. The negative trend line capping RSI is a further indication of the downside potential in the market. As long as resistance at 1420 remains intact, we are likely to see choppy price action with a bearish bias dragging the market all the way down to 1400. A break below that level would expose the 1392 and 1379 areas. In the alternative scenario, the upside breakout of 1420 could open the way to 1428 and 1432. A smattering of economic data today comes in the form of US Empire State Mfg Survey and US Treasury International Capital.

Dafni Serdari
Market Analyst
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