The tide appears to be shifting in favor of stock market bears!
Recently, the S&P 500 index fell below an upward trend line that has been steady since October of last year, which raises the possibility of a downward trend.
Although technical indicators continue to indicate the presence of bullish sentiment, a downturn may be necessary to draw in additional sellers.
The 100 SMA is above the 200 SMA, as seen in the 4-hour chart above, and Stochastic has potential to move north before indicating overbought circumstances.
The index can then decline to the previous trend line, which also happens to be a resistance area and the 100 SMA dynamic inflection point.
An further upside hurdle might be added at the 4,000–4,050 range by a short-term falling trend line connecting the highs since last month.
It appears that concerns over potential bank runs in the wake of the SVB collapse are still present. Investors appear to be still concerned about potential liquidity problems in the future, despite Treasury Secretary Yellen's assurances that the banking system is currently solid and that deposits are safe.
If market participants avoid riskier investments like stocks if this mindset persists, the stock market may see another week of losses.
