{"id":439632,"date":"2026-10-07T19:25:19","date_gmt":"2026-10-07T12:25:19","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/the-sp-500-reached-a-new-record-high-but-the-gains-are-vulnerable-to-a-sharp-reversal-439632\/"},"modified":"2026-10-07T19:25:19","modified_gmt":"2026-10-07T12:25:19","slug":"the-sp-500-reached-a-new-record-high-but-the-gains-are-vulnerable-to-a-sharp-reversal","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/the-sp-500-reached-a-new-record-high-but-the-gains-are-vulnerable-to-a-sharp-reversal-439632\/","title":{"rendered":"The S&P 500 reached a new record high, but the gains are vulnerable to a sharp reversal"},"content":{"rendered":"
\n

FUNDAMENTAL
\n OVERVIEW<\/p>\n

\u00a0<\/p>\n

The S&P 500 managed
\n to rally into a new record high yesterday despite strong tensions under the
\n hood. There\u2019s been a significant divergence in market breadth, but the more
\n important one is with US credit spreads which have been widening considerably.<\/p>\n

Credit spreads are a
\n useful indicator of financial conditions and risk appetite. When growth
\n expectations improve, credit spreads tighten and the risk sentiment turns
\n positive. On the other hand, when growth expectations deteriorate, credit
\n spreads widen and the risk sentiment turns negative.<\/p>\n

\n

Credit spreads generally lead the stock market, so the
\n recent rally might not have been a healthy one, and the risk of a quick
\n unwinding remains high. <\/p>\n

The US and Iran continue to be at a stalemate and
\n supply disruption risks continue to outweigh the improvement in physical
\n exports. Iran has also vowed to soon block the \u201cillegal\u201d routes in the Strait
\n of Hormuz, which could send oil prices higher. <\/p>\n

Looking ahead, given this week\u2019s light calendar,
\n US-Iran developments will remain in focus. Next week, we will also get the US
\n CPI report which could trigger a hawkish repricing and weigh on the market in
\n case the data comes out hotter than expected. <\/p>\n

S&P 500 TECHNICAL ANALYSIS \u2013 DAILY TIMEFRAME<\/p>\n<\/p>\n

On
\n the daily chart, <\/a>we can see that
\n <\/a>the S&P 500<\/a>(CFD contract) managed to rally into a new record high yesterday
\n despite the underlying macro and geopolitical headwinds. If we get a correction,
\n we can expect the buyers to lean on the trendline, with a defined risk below
\n it, to keep pushing into new highs. The sellers, on the other hand, will look
\n for a break lower to extend the drop into the 7,500 level next, with the 7,600
\n level as the first target.<\/p>\n<\/p>\n

S&P 500
\n TECHNICAL ANALYSIS \u2013 4 HOUR TIMEFRAME<\/p>\n<\/p>\n

On
\n the 4 hour chart,<\/a> we have a
\n support zone around the 7,775 level. The buyers will likely step in around the
\n support, with a defined risk below it, to position for a rally into new highs.
\n The sellers, on the other hand, will look for a break lower to extend the drop
\n into the major trendline next.<\/a><\/p>\n<\/p>\n

S&P 500 TECHNICAL
\n ANALYSIS \u2013 1 HOUR TIMEFRAME<\/p>\n<\/p>\n

On the 1 hour chart, we
\n have a minor downward trendline defining the current pullback. If the price
\n bounces on the support and pulls back into the trendline, we can expect the
\n sellers to lean on it, with a defined risk above it, to keep pushing into new
\n lows. The buyers, on the other hand, will look for a break higher to increase
\n the bullish bets into new record highs. The red lines define the average daily range<\/a> for today. <\/p>\n

UPCOMING CATALYSTS<\/p>\n

Today<\/a>we
\n have the FOMC meeting minutes. Tomorrow, we get the latest US Jobless Claims
\n figures. On Friday, we conclude the week with the University of Michigan
\n Consumer Sentiment survey.<\/p>\n

This article was written by Giuseppe Dellamotta at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

FUNDAMENTAL OVERVIEW \u00a0 The S&P 500 managed to rally into a new record high yesterday despite strong tensions under the hood. There\u2019s been a significant divergence in market breadth, but the more…<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-439632","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/439632","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=439632"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/439632\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=439632"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=439632"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=439632"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}