S&P 500: Could Bearish Engulfing Pattern Signal Local Top? Here’s What to Watch
2024.10.17 03:18
US stocks surged on Wednesday, bouncing back toward record highs as investors sifted through a wave of earnings reports, with Morgan Stanley (NYSE:) standing out.
The climbed nearly 350 points, or 0.8%, to close at a record 43,077.70. The tech-heavy added 0.3%, while the rose 0.5%, closing just shy of its own record.
All three major indexes recovered after Tuesday’s pullback from all-time highs. A sharp cut in ASML (NASDAQ:) 2025 sales forecast had rattled confidence in the AI chip trade, weighing on stocks like Nvidia (NASDAQ:).
Despite Wednesday’s gains, the S&P 500 has shown a pattern of bearish engulfing candles, which are often followed by an uptick. These candles have typically appeared around key turning points for the index.
The true test, however, will be where the index lands a week from now, rather than in the immediate days ahead. This time, though, the pattern emerged on a Tuesday, unlike previous instances, which mostly occurred on Thursdays.
Semiconductors Pause – What’s Next?
Despite Nvidia’s more than 3% rise yesterday, the remained flat, reflecting broader weakness in the sector.
The key question now is where the ETF goes from here—the chart doesn’t look promising, and yesterday’s action seems more like a pause than a turnaround.
Wingstop Breaks Below Key Support Signaling Weakness for Nasdaq
Yesterday, Wingstop’s (NASDAQ:) stock dropped nearly 4%, breaking below key support. The next potential support level is around $366. Why does Wingstop matter?
Interestingly, it seems to have a knack for signaling where the might be heading.
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