S&P Outlook

Market Outlook

The S&P 500 remains under pressure after breaking its October 2023 uptrend earlier this month. Last week, price attempted to bounce but stalled at the short-term downtrend line from the February 2025 high. That rejection led to another rollover, with the index closing just above the 5575 level, an area that has acted as both resistance and support throughout mid-to-late 2024.

Momentum has clearly shifted to the downside, and while price has moved sideways over the past three weeks, it remains below key weekly moving averages (10EMA, 20EMA, and closed below the 50SMA again last week). The longer-term uptrend from October 2022 is still intact, with its trendline now converging near the 5340–5400 zone, a major confluence of potential support if this decline deepens.

For bulls, reclaiming 5780 and the moving averages, is key to regaining control. For bears, a decisive break below 5340 would threaten the long-term trend. And yes, this could happen. We are just about 9% down from February’s peak, and we have seen worse declines in the recent years:

Let’s look forward at potential scenarios for the SPX.

🟢 Bullish

• SPX reclaims the 10EMA and 20EMA (currently ~5686 and ~5731).

• Clears the short-term downtrend line from the February high.

• A strong weekly close above 5780, with volume and both EMAs reclaimed.

• Reclaiming these levels could shift momentum back to the bulls and open a path toward the all-time high near 6123.

🔴 Bearish Scenario

• Price fails to reclaim moving averages and breaks below 5575.

• Downside targets the 5400–5340 zone, which includes:

  • The October 2022 uptrend line,

  • Prior support from Sept 2024,

  • Resistance-turned-support from May 2024.

• A break below 5340 with strong volume and no bounce off trendline would mark a major trend shift and could invite further downside.

⚪️ Neutral Scenario

• The S&P continues to chop between 5580 and 5780 (a range that’s held for the past three weeks).

• Price remains stuck below the EMAs but above key support, showing indecision rather than direction.

• Awaiting a clear catalyst to break the range.

• Watch for overlapping candles and low conviction closes within the 5580-5570 zone.

For a daily chart swing trader, earnings remain one of the biggest catalysts for tradeable moves. We are heading into that window with some companies reporting in April and others releasing results in early May. Until then, it's possible we remain range-bound as the market waits for confirmation and clarity.