S&P 500 Holds Its Reversal Despite Hormuz Blockade ThreatUS 500CAPITALCOM:US500CapitalcomAfter failed talks in Pakistan on Friday and Donald Trump’s plans to blockade the Strait of Hormuz, escalation risk has moved firmly back onto the radar. Oil has responded in kind, pushing back towards the $100 level, yet in European trading the S&P 500 is holding onto last week’s recovery rather than giving it back. From Failed Breakdown to Reversal Last week’s move higher is best understood through what came just before it. Price had broken below a well-defined support area, only to reverse quickly and reclaim that level, leaving a failed breakdown in its wake. These types of moves tend to matter because they shift positioning as much as they shift price, with sellers caught on the wrong side and forced to cover as the market moves back against them. The recovery that followed was not tentative. Buyers stepped in with intent, driving price back through resistance and re-establishing upside momentum in a way that suggests more than just a short-term bounce. When a market transitions from accepting lower prices to rejecting them, the behaviour changes, and that is what we have started to see here. What matters now is not the speed of that move, but how it holds up when challenged. US500 Daily Candle Chart Past performance is not a reliable indicator of future results Recovery Trendline Becomes the Key Test for Buyers On the 4-hour chart, the shift in behaviour is already taking shape. The prior descending trendline has been broken and reclaimed, and price is now forming a sequence of higher lows as it pushes back into overhead resistance. What had been a market trending lower has, at least in the short term, transitioned into one that is beginning to build from a higher base. The recovery trendline now provides a useful framework for understanding that shift. Each pullback since the reversal has found support at progressively higher levels, with price respecting that rising structure rather than slipping back into the prior range. It’s not an aggressive move higher, but it is a controlled one, which tends to be more sustainable if it continues to develop. That leaves the focus on how price behaves around that trendline. If buyers are still in control, dips towards it should continue to be absorbed, reinforcing the idea that last week’s move marked a change in tone rather than a short-lived reaction. A failure to hold it, on the other hand, would suggest the recovery is losing traction and that the market may need more time to consolidate before attempting another leg higher. US500 Four-Hour Candle Chart Past performance is not a reliable indicator of future results Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.31% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.