The pressure on the S&P 500

⭕️ The pressure on the S&P 500 stems from a broad downward retrenchment led by the technology and software sectors. Concerns are mounting about the viability of AI spending following the results of major companies and growing worries about return on investment. This shift has prompted funds to exit high-growth stocks, while bets on interest rate cuts have increased, though this has not yet succeeded in supporting stocks.

⭕️ This pressure is further amplified by a structural factor related to leveraged equity funds. Data shows that the assets of 616 leveraged equity ETFs have declined by 7.2% since the beginning of February, a pattern similar to what occurred at the beginning of 2025 when these funds led waves of forced selling.

⭕️ The breakout from the upward channel after repeated failures above 7000, with a clear break below the 6900-6930 area, followed by a rapid decline towards 6740, reflects accelerated selling consistent with rebalancing pressure from leveraged funds. 6740 represents support, and the RSI indicator remains below comfortable neutral levels, suggesting that momentum has not yet regained its balance.

⭕️ Continued trading below this level is likely. 6900 with a tendency to retest 6740 and a potential extension towards 6655 if the downward movement from leveraged funds continues, and any rebound remains corrective as long as it stays below the 6900 area.