Equity markets started the week strong and pushed the S&P 500 up more than 1.0% at the day's high. The takeaway for investors is that gains were capped just above last week's highs and at a level that could be expected to provide stiff resistance. The candle formed has a visible upper shadow confirming the presence of resistance and the possibility this is as high as the index will move for now.

The rally was driven by easing fear of inflation. The decline in the pace of inflation is good news, but conditions are still pressuring the outlook for S&P 500 earnings. With the outlook for S&P 500 earnings in decline, it is almost certain the index will fall. This week is the first real weak of peak earnings reporting season for the 4th quarter, so this outlook could change; the risk is that it won't and may worsen.