Weekly Update S&P 500

Welcome to this week’s update on the S&P 500. The time of writing is around midday European time on friday, so the trading day and trading week haven’t fully finished yet. However, the 4th of July falls on Friday this year, which is a public holiday in the U.S., so markets will be closed. Because of that, there likely won’t be much movement in the final hours of this trading week.

Looking at the 4-hour chart of the S&P 500, we can see that it’s been a strong week so far, with a gain of about 1.1%. We’ve had a solid move up. There are black trendlines marking a short-term upward rising trend channel, and we’ve been trading along the upper edge of this channel. After this strong move up, we’re now seeing a bit of rejection here on Friday.

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Weekly Chart Suggests Caution Despite Strong Rally

Switching to the daily chart: we had the low in April, and since then, prices have risen nearly 30%. So it’s not just a rebound — it’s been a very strong trend. Currently, we are in overbought territory. We already talked about that last week, but this week the overbought condition is even more pronounced, with the RSI above 70.

We are also pushing through a gray-shaded area of the upward rising trend channel that has guided the price since the April low. This channel includes two gray zones, one green zone, and one red zone. The red zone represents resistance at the top, green is support at the bottom, and the gray zones in the middle can act as either support or resistance. Given the overbought conditions and the resistance we’re approaching, we should expect a pullback soon. Of course, the rally could still continue for a bit, but at some point, a correction is likely.

The next major support zones are the previous all-time high from February, marked by a blue dashed line, and below that, a strong support zone around 6,100 points. At some point, we expect to at least retest the old all-time high. When that happens remains to be seen.

Looking at the weekly chart, we have a long-term trend channel that’s been in place since the major low in October 2022. Again, we have green, gray, and red shaded areas representing support and resistance. It’s quite interesting to note that for over two years, prices respected this trend channel — until the drop we saw in April, which pushed prices below the lower boundary. But with this very strong rally since then, prices have climbed back into the trend channel and are now trading right in the middle of it, within the gray-shaded area. That area should now act as resistance.

We’ll continue to monitor whether this long-term trend channel remains valid — it’s quite telling that after breaking below it, we’ve now re-entered it. As mentioned earlier, given the overbought conditions on the daily chart, we should expect some kind of pullback in the next one to two weeks. So it’s wise to be a bit cautious here: consider taking some profits after the strong gains in recent weeks, and perhaps avoid entering new stock positions right now. It may be better to wait for a pullback over the coming one or two weeks.

For subscribers it is very important to follow our risk management measures that we provide with all our services to protect against losses in case support zones break

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S&P 500: Seasonality Insights for 2025

So far this year, the seasonal pattern for the S&P 500 has played out pretty much as expected. The first few months brought some noticeable volatility, which lines up with what we usually see in the early part of the year. Historically, January and February tend to be choppy, and that turbulence can sometimes stretch into March — and that’s exactly what happened this year.

Looking ahead, the seasonality suggests we’re heading into a stronger period as we move toward summer. Typically, markets see some gains during this stretch, though it’s normal for there to be the occasional correction or sideways move along the way. It’s not a straight line up.

If the seasonal pattern continues to hold, we might expect a bit more volatility in May, June, and again in August and October. These months often bring correction phases or market shake-ups. Of course, this isn’t a guarantee — it’s more of a roadmap based on past patterns.

Ultimately, seasonal trends provide valuable context, but they must be considered alongside current market dynamics and technical analysis for a clearer picture.

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Our Market Dashboard provides a quick overview of the current market conditions and, more importantly, the associated risk. You can view a chart of one of our tools, the Risk Level Indicator, showing predicted risk from 1998 to 2025. If you are interested, you can visit our Dashboard site here.

The world of finance is complex and includes many technical terms. For explanations of these terms, I recommend using the Investopedia dictionary.