S&P 500 (SPX) Technical Outlook Moving Forward Overview
The S&P 500 remains in a clear upward trajectory despite last Friday’s sharp selloff. The drop was largely imminent after a historic rally from the April tariff lows, with the index marking consecutive all-time highs before facing resistance at the upper boundary of the long-term ascending channel that has guided price action since 2021. While the broader trend remains intact, the recent rejection signals a potential shift in market dynamics, suggesting that momentum may be cooling. Moving forward, the environment appears more balanced between opportunity and risk, as active traders we should approach it with flexibility and an open mindset.
Key Scenarios
1. Scenario 1 – 15% Correction (Bearish Pullback)
• Target: 5673 - 2024 ATH
• This scenario represents a deeper, healthy correction following the parabolic move from 2023 to 2025.
• It aligns with the lower boundary of the long-term trend channel and prior support zones.
• A move of this scale would likely be triggered by macro tightening, earnings contraction, or a geopolitical shock.
2. Scenario 2 – 10% Correction (Healthy Pullback)
• Target: 6,147 - 2025 ATH
• A milder correction that would bring SPX back toward the February 2025 ATH region.
• This would reset market sentiment from current greed levels without breaking the broader bullish structure.
• It’s the most probable near-term scenario if momentum stalls below the 7,000 mark.
3. Scenario 3 – Euphoria and Extreme Greed (Bullish Extension)
• Target: 7,000+ (psychological level)
• If risk appetite remains strong and macro data stays resilient, the SPX could extend higher into an overbought “euphoria phase.”
• This would likely form a short-term blow-off top before a correction later in 2026.
Conclusion
The S&P 500 remains structurally bullish, but risk-reward is increasingly skewed to the downside in the short term.
• Key resistance: 7,000 psychological level
• Key supports: 6,150 (10% correction) and 5,670 (15% correction)
Remain cautious of potential exhaustion above current highs however long-term investors and trend followers can remain constructive as long as the price respects the ascending channel.
Good luck !
Ghost
