SP500 Declines Amid Rising Yields

Stocks were spooked by accelerating yields and global equity markets dipped lower on Thursday, with the SP500 futures trading at 0.45% weaker during the London session and trading at around 2,910 USD.

It seems the index has formed a double/triple top pattern at the 2,940 USD resistance and, since it has not broken above, Bulls managed to obtain some profits from the recent rally and, therefore, the price steeply declined. In addition, rapidly accelerating yields in the US to new cycle highs, are making stock investors nervous and equities are being sold-off.

The price is now testing a short-term bullish trend line at around 2,908 USD and if this is not held, further decline to the stronger demand zone of previous lows near 2,904 USD could occur. However, judging by the recent decline, the price may easily drop below 2,900 USD if the current bearish pressure persists.

If the situation improves, the SP500 index might rally again, with the first bullish target probably at 2,920 USD. However, the inability to post new swing highs could leave stocks vulnerable and, therefore, volatility might be elevated today.

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