Above we can see that the S&P 500 has formed a inverse Head & Shoulder pattern over a 3 year period, before finally breaking this key level of resistance come support 4820.
Usually we expect price to then travel equidistant from the Head to Neckline in the direction of the break. Therefore, we can see that the potential price top after this pattern plays out is 6651.5.
We can also see that the S&P 500 has been trading within a parralel channel, starting with the second half formation of the Head & Shoulder pattern in October 2021, albiet with one false break below the lower trend in September - October 2023 before contiuining to respect the channel until today.
This channel allows us to see where our target of 6651.5 hits out upper channel resistance line. Which happens on the 7th April 2025.
Fundamentally, this coincides with the current landscape being set out by Trump, with his harsh tariffs on Canada, Mexico, Europe and China he is very likely going to cause bottleneck inflation, delayed after he initially implements them in the new year. Combine this with the Federal Reserve lowering interest rates, the yield curve un-inverting, geopolitical risk and energy supply bottlenecks for the AI industry. I believe we are about to see 5000 hit potentially by the end of 2025.
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