S&P 500 Crashes Out After Failing to Hold Above 4580

S&P 500 Price Analysis – January 26, 2022

S&P 500 crashes out of its rising channel after it fails to hold above the 4580 significant level. Unlike previous times through the rising channel, the market experienced a very turbulent period between late November 2021 and mid-January 2022. During this period, the confidence of the buyer was shaken, and what followed this period was a market slump beyond the middle line of the channel and the 4580 significant level.

S&P 500 Significant Level

Resistance Levels: 4810, 5000
Support Levels: 4580, 4270

S&P Long Term Trend: Ranging

A great show of bullish strength has been exhibited in the market since the end of the first quarter of 2020. The market’s drops were managed such that all the general tendency of the market was upwards. This spanned through most of 2021, but by the end of 2021, there was much excitement in the market as the bears began to break rank, undulating the price near the middle line.

By the time the market settled, it crashed through the middle line, which could initially be counted as normal. But furthermore, the price crashed through the MA period 80 (Moving Average), the 4580 significant level and out of the rising channel. Bears pulled through to 4270 before the market had a respite. Price is now trying to recover from the 4270 level with a large bearish candle. The Relative Strength Index is now rising out of the oversold zone.

S&P 500 Short Term Trend: Bullish

On the 4-hour chart, the market slump has been arrested above the 4270 price level. Buyers are steadying themselves to resume the uptrend after the latest setback. The market has been forged into a rising triangle pattern, which is a bullish structure. The RSI backs this structure as it rises to 48. We can expect the market to break out upward and head back towards the rising channel.

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