Bearish breakout coming in the S&P 500?

The benchmark S&P 500 equities index (US500.I) is forming what looks to be a Rising Wedge pattern testing the lower trendline yesterday. 

Breakout from such a wedge usually occurs approximately two-thirds of the way to the apex (where the two lines meet), and we are almost there. Both the Relative Strength Index and and MACD are showing divergence, which indicates a bearish breakout. 

A close outside of one of the trendlines is needed for confirmation. If the index indeed breaks out bearish around current levels, our minimum price target would be around 2,731, which is half the pattern height subtracted from the breakout price, as well as about the 0.764 retracement level of the wedge. 

We see some support at 2,795. and 2,756. 

Expect a pullback after the likely break out where buyers try to pull the market back above the lower trendline. 

For the potential bear scenario to not play out, a close above 2,853 is needed (i.e. a close of the gap on the S&P 500 cash index). A close above that level could propel the market to new highs.

Source: Saxo Bank

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (