Game of Trades: SP500 CRASHES as this Chart BREAKS a 20 YEAR Resistance

The past week has been harrowing for investors, as the S&P 500 gapped lower last week following the latest inflation data. It also rejected a key long-term resistance line. The result? A potential further drop for markets ahead.

Until the break, markets were looking on track to snap back from their bearish outlook. Now, with the current economic developments, a further downside looks likely.

Market sentiment, fundamentals, and now the charts show that markets have more volatility in the coming weeks. Investors looking for a short-term buy in the market should look for a further rise in volatility first.

In the meantime, market volatility has risen as US bond yields have also jumped higher. 2-year treasury yields surged to 3 percent. That also broke short-term resistance on a technical basis. While breaks can happen and quickly unwind, they can also lead to a new trading pattern.

Finally, oil prices remain high. With oil yet to fully roll over, bond yields will likely keep rising. And stocks will continue to trend lower, as higher energy prices will weigh on profitability and consumer spending.

In short, traders should look for oil prices to make a major pullback. And for volatility to move higher first, combined with another leg lower in the stock market. Once those factors line up, traders can look for short-term buying opportunities in the next few months.

To watch the full video and see the charts behind today’s trends, click here.