George Davis, Chief Technical Strategist at RBC Capital Markets, says a shift in the risk backdrop may be at hand (from risk seeking to risk aversion), which would usher in a corrective period, but one key technical ingredient is missing: confirmation of trend changes and reversal patterns.

He says the key levels to watch that would provide said confirmation are:

S&P 500
A daily close below 3317 would trigger a bearish trend reversal that would open up the 3200 region as part of a corrective phase (see SPX Chart).

Gold
Prices are attempting to stabilize near the previous all-time highs between 1912 and 1921. Key uptrend support at 1803/1860 should serve as a “value area” for rebuilding long strategies.

US Dollar
A daily close above 93.99 for the US Dollar Index (DXY) is required to confirm a double bottom pattern that would then target 94.65 and then 95.72 as part of a corrective phase. For EURUSD, a daily close below 1.1696 would confirm a double top pattern and open up the 1.1495/1.1535 area. Similarly, for GBPUSD, a daily close below 1.2982 would confirm a double top pattern and trigger a deeper correction towards 1.2851 and 1.2631.

US Yields
For US 10-year yields, however, a break higher has been confirmed though Davis sees limited topside towards the 0.80/0.90 area, an area which he thinks will attract buying interest in bonds.

See SPX Chart.