Bearish close for USA.

/ SP500 is available for trading on platforms MT4, MT5, Varchev Absolute Trader. The article is not a trade recommendation. /

Strongly negative end to the week and sales on all exchanges. Sentiment is highly negative and traders are selling off stocks and seeking safety in Treasurys. The negative fundamental had already weighed on the market and SVB Financial Group’s turmoil triggered a strong sell off mode.

Less than an hour to the end of the trading day, the weekly Bearish engulfing Candle suggests the downtrend to continue, the Sequnetial is in a downward countdown, the next support zone (3750 – 3800) is critical for the entire recovery after the bottom. A break below it will open the potential to reach 3200-3350.

The Dow and SP500 close below the trend line of the descending price channel, a sign of downward acceleration. Given that the put/call ratio is near year-to-date highs, DeMarker is not oversold and Tuesday’s CPI report could still see a consolidation around current levels and a slight bounce up.

A possible rise near the local resistance (3920 – 3970) could give the most aggressive traders an opportunity to open short positions with a potential first target of 3750 – 3800.

Alternatively:

A pullback and close above the 4050 – 4080 resistance zone will spoil the bearish scenario and open the potential for a range move in the coming months. Stop loss for short is above 4050 – 4080, measured against the size of the margin account.