The SPDR S&P 500 ETF (SPY) stock continued rising and is sitting at a record high as the strength of the equities market accelerates. The fund was trading at $605 on Monday, bringing the year-to-date gains to about 27%.

Other related funds like the Vanguard S&P 500 (VOO) and the iShares S&P 500 (IVV) have also soared this year. 

Technical analysis points to a future SPY ETF reversal

The SPDR S&P 500 ETF has been in a spectacular rally for decades, which explains why it has become one of the most popular funds in Wall Street.

As a result, the fund has constantly remained above the 50-day and 200-day Exponential Moving Averages (EMA), meaning that bulls are in control.

However, historically, the ETF has seen periods of bear markets, as we experienced in 2022, when it crashed by over 20%. 

There is a risk that the fund will have a strong bearish breakout, possibly in 2025. That’s because, as shown below, the fund has been forming a rising wedge chart pattern, which is a popular bearish reversal sign.

This pattern is made up of two ascending trendlines that seem to be converging. The lower line connects all lower lows since August, while the upper one connects the higher highs.

In most periods, a rising wedge pattern results in a strong bearish breakdown, especially when the two lines near their confluence level.

There are other signs that the SPDR S&P 500 ETF will suffer a harsh reversal. For example, the MACD indicator has remained above the zero line but it is moving sideways, a sign of a bearish divergence.

The Relative Strength Index (RSI) indicator has also moved sideways below the overbought level. Also, the stock was trading at the strong pivot release of the Murrey Math Lines indicator.

Therefore, there is a likelihood that the S&P 500 index will suffer a harsh reversal, probably in 2025. If this happens, it will likely drop to the bottom of the trading range at $545.

On the flip side, a move above the key resistance level at $640 will point to more gains, possibly to the extreme overshoot level of $656.

Catalysts for an S&P 500 index reversal 

There are a few potential catalysts for a bearish reversal of the SPDR S&P 500 ETF.

First, Donald Trump has vowed to be tough on trade and has already threatened to impose tariffs on imports to the United States from its key trading partners like China, Mexico, and Canada. If he goes ahead with these plans, there are rising odds that he will trigger a trade war that will impact most companies in the S&P 500 index like NVIDIA and Walmart.

Second, Trump has also vowed to be tough in China, the second biggest economy in the world. He could do that by imposing tariffs and trade restrictions as he did in the last term. These actions could hurt more American companies that do a lot of business in the country.

Third, there are concerns about the valuation of American companies, which could trigger a reset. The forward one-year PE ratio for the S&P 500 index is 22, higher than the five-year moving average of 19 and higher than the ten-year average of 18.

Additionally, the fiscal state of the US economy is major risk as public debt has now surged to over $36 trillion. Analysts expect that the figure will be over $40 trillion in the next few years. Worse, Trump has vowed to cut more taxes, a move that will lead to more deficits over time.

To be clear: a drop in the SPY ETF stock will be brief as it has done in the past decades. Historically, the index drops and then bounces back. We saw that during the COVID-19 years, the Global Financial Crisis, and the dot com bubble.

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Archer Aviation (ACHR) stock price suffered a harsh reversal as the number of investors shorting it jumped. After being one of the best-performing companies in Wall Street, it has dropped by over 26% from its highest level this year. This pullback has brought its market cap to about $4 billion.

Why ACHR stock price jumped in November

The Archer Aviation share price skyrocketed in November as investors rotated back to companies in the Electric Vertical Takeoff and Landing (eVTOL) industry. 

Joby Aviation, the biggest player in the eVTOL industry soared to $9.33, up by over 94% from its lowest level this year. Similarly, Ehang share price jumped by almost 30% in the same period.

The surge happened after the industry received support from an analyst from Needham. In a statement, the analyst hinted that the sector was significantly undervalued and that the companies would ultimately bounce back. 

The analyst remained optimistic in Archer Aviation and Joby, which he believes are better positioned to become market leaders in the industry. Besides, the two companies have raised substantial sums of money and have received most of the certificates they need to start commercialization in 2025 and 2026.

The analyst recommendation then led to the Fear of Missing Out (FOMO) in these eVTOL companies. In technical analysis, these stocks simply moved into the markup phase of the Wyckoff Method. This phase is characterized by higher demand for an asset. 

Why the ACHR share price has crashed

There are three potential reasons why the ACHR stock price has nosedived this month. First, the stock crashed as it entered the distribution or the markdown phase of the Wyckoff Method. In most periods, this is one of the most bearish parts of an asset. 

Second, there are signs that investors have started to short the company as the short interest has risen significantly in the past few weeks. According to SeekingAlpha, Archer Aviation’s short interest has risen to almost 20%, meaning that a fifth of its outstanding shares are held by short-sellers.

These short sellers are likely concerned about Archer Aviation’s untested business model and the fact that it will need to dilute its shareholders to fund its operations. 

Archer’s fundraising from Stellantis had clauses of dilution. As part of the agreement, Stellantis will provide it with manufacturing funds and recoup it through quarterly share distributions.

The most recent results showed that Archer Aviation’s net loss surged to $115 million from $51.6 million a year earlier. Its adjusted EBITDA also rose from minus $64.8 million to minus $93.5 million in the last quarter. It ended the quarter with $501 million in cash, meaning that another cash raise cannot be ruled out.

Many short-sellers also believe that Archer Aviation’s business is untested and that there is uncertainty about whether it will be successful in the long term. 

Read more: Archer Aviation: the next millionaire-maker stock?

Archer Aviation stock analysis

The daily chart shows that the ACHR share price made a strong comeback in November. This recovery happened after the stock formed a falling wedge chart pattern, a popular bullish sign.

It even formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. The stock also moved above the key resistance at $7.45, its highest swing in August 2023.

Archer Aviation has formed a bearish engulfing pattern, a popular reversal pattern. This means that it could drop and move to the 50-day Exponential Moving Average point at $4.57, which is about 37% below the current level. More gains will only be confirmed if it rallies above the year-to-date high of $9.84.

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Old-school cryptocurrencies are in a strong bull run this week, largely outperforming newer ones. EOS price jumped to a high of $1.5230, its highest level since September 22. It has jumped in the past five consecutive weeks and is up by 250% from its lowest level this year.

NEO, another cryptocurrency, jumped to $26.14, its highest level since April 2022. BitTorrent price jumped to $0.000001910, up by 176% from its lowest level this year.

Inspired by Ripple and Stellar 

The main reason for the ongoing EOS, NEO, and BitTorrent prices is that they have been inspired by the recent success of Ripple (XRP) and Stellar Lumens (XLM), which have soared by almost 500% in the past 30 days. 

Ripple’s market cap has also jumped to over $125 billion, making it the third biggest crypto in the industry. It is slowly nearing its all-time high 

Similarly, Stellar Lumens, the popular payment-focused coin has also jumped, mirroring that of Ripple. The two have a common history since Jed McCaleb, Stellar’s founder, was also on the team that started Ripple Labs.

The two coins have risen because of the recent Donald Trump victory, which promises changes at the Securities and Exchange Commission (SEC). Gary Gensler is expected to resign in January, while Trump is considering picking Paul Atkins to be the next head of the agency.

The new changes mean that Ripple’s legal challenges could end soon, and that a spot XRP ETF will be listed as soon as in 2025. Ripple has largely won the case brought in 2020. 

In July last year, a judge ruled that XRP was not a security but that Ripple Labs had committed a crime in its fundraising. 

As a result, she ordered the company to pay a $250 million fine earlier this year, much lower than the $2 billion that the agency was seeking. The SEC has pledged to appeal the ruling, putting Ripple Labs in legal jeopardy.

Therefore, EOS, NEO, and BitTorrent are rising as many cryptocurrencies that became hugely popular in 2021 aim to be the next XRP. Indeed, many others, including Litecoin, Tron, and Bitcoin Cash have all gone vertical. 

EOS price analysis

Technicals also explain why coins like EOS and NEO are soaring. The weekly chart shows that the EOS price has bounced back after being in a consolidation between $0.4325 and $1.3640 in the past three years. It formed a triple bottom at $0.4325 and has now jumped above its neckline at $1.3640.

EOS price has moved above the 50-week moving average, signaling that the uptrend may continue. If this happens, the next key resistance level to watch will be at $3, the highest point in March 2022. If that happens, it will imply a 115% above the current level.

Neo price forecast 

The weekly chart shows a close similarity between the EOS and NEO prices. It has formed a cup and handle pattern and is attempting to rise above the key resistance level at $24.18, its highest level in April 2024.

The NEO price has jumped above the 50-week moving average, while oscillators like the Relative Strength Index (RSI) and the MACD have continued to point upwards.

Therefore, the coin will likely continue rising as bulls target the next important resistance level at $50 in the near term. A drop below the support at $20 will invalidate the bullish view.

BitTorrent price analysis

The daily chart shows that the BitTorrent token has jumped, mirroring the performance of Tron, which has surged to a record high. BTT and TRX are related because they are owned by Justin Sun.

The BTT token has formed a golden cross pattern as the 200-day and 50-day moving averages crossed each other. It is also forming a cup and handle pattern whose upper side is at $0.0000022, its highest level in March. Therefore, the coin will likely continue rising as bulls target that level, which is about 30% above the current level.

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The USD/KRW exchange rate formed a God candle on Tuesday, rising to its highest level on record as the president announced an emergency martial law in South Korea. The currency jumped to 1,441 and then eased a bit to 1,414.

South Korean political crisis

The South Korean won collapsed and approached its all time low after the president announced the start of martial law following weeks of budget negotiations with the opposition party.

The pair then retreated to 1,414 as traders digested the new developments and its implications. It also dropped after the parliament rushed and voted to stop the state of emergency.

South Korea’s president also decided to do away with the martial law on Wednesday morning, after coming under intense pressure.

Now, the opposition party is working to impeach President Yoon Suk Yeul, a move that may attract some members of the coalition government.

The South Korean won also retreated after the central bank intervened by pumping liquidity and pledging to deploy measures to stabilize the market. The bank released that statement when it held an emergency meeting to deliberate on the issue.

All these issues are happening at a time when the South Korean economy is not doing well, mostly because of Samsung, which has accounts for about 25% of the economy. 

The company is in a crisis after facing substantial challenges in the artificial intelligence industry, where American and Taiwanese companies. 

These challenges could lead to a slower trade surplus after the $44 billion it made with the US a year earlier. Data released recently showed that the South Korean economy avoided a recession narrowly in the the third quarter as it expanded by 0.1%.

Just last month, the South Korean central bank announced a surprise rate cut to 3%, and analysts believe that another cut is coming. The bank slashed the rates to deal with the slowing economy.

South Korea is also bracing for more trade uncertainty under the Donald Trump administration. While South Korea is an American ally, Trump has always expressed concerns about its trade surplus and the fact that the US spends billions of dollars defending it from North Korea.

The USD/KRW will continue to focus on the developments in South Korea. At the same time, traders will be watching the upcoming jobs numbers from the United States. These numbers will help to determine whether the Fed will cut or hold rates in the next meeting.

USD/KRW technical analysis 

USD/KRW chart by TradingView

The weekly chart shows that the USD/KRW exchange rate has been in a strong bullish trend in the past few weeks. It rose and retested the upper side of the ascending channel shown in green.

The pair has jumped above the key resistance at 1,400, its highest level on April 15. It invalidated the risky double-top pattern after crossing that level. It has also moved above the 50-week and 25-week moving averages.

Therefore, the USD to KRW exchange rate will likely continue rising as investors focus on the South Korean political crisis. If this happens, it will soar to 1,446, its highest level in 2022 ane its all-time high.

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