Last week was a volatile one, especially for traders involved in after-market trading.

The escalation in tensions between Iran and the US led to a roughly 2% decline in the S&P 500. But what followed certainly surprised at least a few market participants. The index rallied on a de-escalation and then proceeded to break to record highs.

Record highs in US equities is not a new phenomenon. But what is surprising is the drastic reversal in risk sentiment.

Take the Japanese yen for example. USD/JPY had been trending lower for about two weeks ahead of last week's events. After the de-escalation, the pair promptly rallied to erase those losses in a short period of only two days.

Further, USD/JPY is trading above 110 at the time of writing, representing a fresh seven-month high. The exchange rate rallied above a declining trendline that extends back to the high posted in 2018, so it's made a significant technical break in the process.

Between looking at the technical developments among safe havens currencies and the metals, the markets certainly seem to be in full "risk on" mode.

Although the view for metals over the broader outlook remains bullish, this may be a good time to look for near-term short setups.

Gold prices have fallen below a horizontal level at $1562 which has been on the radar for quite some time. This level stems from a monthly chart and was well-respected between 2011-2013.

So far, gold prices have nearly fully wiped out gains for the month. The outlook for metals could further deteriorate if gold were to close the month near current prices considering the potential candlestick formation.

Looking at an hourly chart of silver, we can see that the asset spend a lot of time trading in a range between $17.77-$17.95 in the last week of December. Currently, silver prices are near the bottom of the range.

We like selling rallies to $17.94 resistance with a stop above $18.11 for a target of $17.40.

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