The S&P 500 may continue to fall: “A shoulder head shoulder book”

Investors turn this Thursday in the sovereign debt of the United States, pushing Treasury yields sharply lower after Russia launched an invasion of several Ukrainian cities. Oil prices are rising sharply, with both contracts climbing above the $105-a-barrel mark for the first time since 2014.

While, equities lose ground and the Nasdaq 100 fell 1.33% after the first trading hour, to 13,329.26 points. The S&P 500, for its part, now cut 1.68% to 4,154.50 points and the Dow Jones lost 2.13% to 32,426.61 units.

As explained Javier Romero, independent analyst“corrections usually come in three waves”, so we can predict that there will be a new fall: we see, marked on the chart, a first wave, which could be “for fear of inflation”, a second today and it would be missing a third.

The market is still bearish. We can draw a trend line that has to be broken to think about building a portfolio in the medium or long term, but right now “I would not recommend taking positions,” explains the expert. The next up you can falling the Nasdaq 100 would be at 12,780 points.

If we look at the S&P 500, “if someone looks for what a head-shoulder is, they will get this formation, it is a book head-shoulder, with bearish divergences”. The problem, says the expert, is that if the index reaches that point, it is difficult to cover the portfolios, “which should have been covered long ago.”

S&P 500

For this reason, in this scenario, the expert recommends having a high level of liquidity, looking at gold, which is acting as a refuge, and at quality companies, such as Microsoft or Tesla.

Check here the technical indicators of the Nasdaq 100 and those of the S&P 500.