Spread betting technical analysis - silver's rally and the S&P 500 record highs in focus.

S&P 500

Last Monday saw the S&P 500 breach into a record high and throughout the week the index continued its ascent to make an intraday high of 2174.8. With US equities leading risk appetite the hunt for yield seems to be continuing. Earnings seasoning is now in full swing which could provide the market the fuel to either continue this drive higher or act as a catalyst for a pull back.

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At present the S&P is 12 full index points from its all-time intraday high and appears to be in a short term consolidation phase between 2174.8 and 2146.7 respectively. The last three trading days shows slight selling pressure as the market seems to fall towards the close, as presented by the upper shadows of the candles. Interestingly we have a potential bearish engulfing candle on Fridays trade which could suggest further downside pressure, with support at 2146. This potential pressure could materialise as the RSI is showing bearish divergence which could suggest this move higher is faltering. Should this be the case and a break of 2146 occurs the next support would be the previous highs the market broke out of around 2136.5. All this being said with the uncertainty surrounding earnings, any upside surprises in the earnings report may act as support for the market pushing it higher.  

Silver

Silver's impressive rally this year is in a state of consolidation; we have seen prices rally from a low of 13.77 and a swing high of 21.13. At present the range is between 20.70 and 19.68  where prices has been in this range for 10 trading days. This price activity is potentially coming under pressure as some technical indicators may suggest. First of all the MACD has rolled over to give a bearish signal after we have witnessed a considerable spike higher, this activity could suggest the market has run out of steam for the time being. Another bearish indication has been the RSI, as we can see the market extended well into overbought territory with the RSI reaching 86 and with today’s fall of 1.75% the RSI has now crossed through the 70 line which may be suggestive of further downside price activity. However, the market may ​have found short term support at the bottom of the consolidation range at 19.68. moreover should this range hold the trend would remain intact until a break of the 19.30 level which may question the short term trend from Junes lows.   

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