The SPX appears bearish as indicated by the formation of a head and shoulders pattern and the RSI approaching strong descending resistance since September 2020. Due to this, I am increasing my shorts and targeting a potential bearish scenario with best-case targets between $3.4k to $3.2k. While technical analysis can provide valuable insights, it is subjective and cannot always be relied upon. Predicting the future direction of the market is inherently uncertain.

There are potential macroeconomic factors that may contribute to bearish sentiment in the coming months, such as the possibility of inflation soaring and leading to a tightening of monetary policy by the Federal Reserve, which could negatively impact equities. Additionally, a banking crisis or housing crash could also cause a significant sell-off in equities, but it’s challenging to predict the likelihood of such events occurring and their timing.

While there is optimism among bulls that April will be a bullish month, unforeseen events can always disrupt market sentiment and cause volatility. Therefore, it’s important to have a clear stop loss in place to limit potential losses in case the trade goes against me. My stop loss is above $4330, which seems like a reasonable level to prevent excessive losses if I’m wrong.

It’s important to remember that no one can predict the future with certainty. Follow me on Twitter for more insights: https://twitter.com/Shapeshifter_io