Weekly Update S&P 500

Hello everybody, and welcome to this week’s analysis on the S&P 500. This week, the S&P 500 had a loss of 2,5%. Last week, we talked about how the market was very overbought, and we looked at several downside levels — multiple support zones all the way down to the 6,000-point mark. It appears that the correction we were discussing last week has started now.

Looking at the 4-hour chart, we can see this price action. There was some up-and-down movement from Monday to Thursday. On Wednesday, we had the FOMC decision, which added some volatility. Then, during the late trading hours on Thursday, we saw a big sell-off — which accelerated on Friday, causing another large drop.

On the chart, you can see that technically we were riding the black trendline — the upper part of the rising trend channel. We struggled near the top of that trend channel, then dropped out of it and fell all the way through the channel, hitting the lower part of the trend — which coincides with a support zone around 6,220 points. So we do have some support here, and we could expect at least a short-term bounce next week.

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August Weakness Kicks In: What Comes Next for the S&P?

Switching to the daily chart, we see two large red candles from Thursday and Friday. You can also see how the broader trend channel — highlighted by green, gray, and red shaded areas — played out nicely. We crawled along the lower gray shaded area earlier this week, and on Thursday, we had a final retest there, before dropping deep into the green shaded zone of the rising trend channel.

This area should definitely provide support. We also have support from the lower-timeframe trend channel we just looked at on the 4-hour chart, as well as a light support zone around 6,220 points — all of which suggest we might see some bouncing or sideways movement next week.

However, we can anticipate a broader correction. The market rallied very fast over the last few months, and such steep upward movement often needs to be balanced by a larger pullback. As discussed last week, we identified several key support zones — all the way down to the strong support level around 6,000 points. That zone remains the likely final target of the current correction.

Of course, it’s also possible that prices don’t fall all the way down there. We have another support zone around 6,100 points. The light support zone at 6,300 points — which we talked about last week — was broken this week, so it will now likely act as resistance. Short-term bounces might fail at that level.

We also have the old all-time high from February 2025 — marked by a blue dashed line — which could also act as support and offer a bounce.

So overall, we now have a clear move to the downside, with several support zones to watch. If the S&P 500 drops all the way to 6,000 points, that would be a correction of around 6–7%, which would be very typical for August — a seasonally weak month for the S&P 500.

This correction is arriving right on schedule. And after it, we would expect rising prices and new all-time highs again. So this could be a great opportunity in the coming weeks to add exposure. The market has been very stretched to the upside, but the long-term trend remains intact — even if we go down to the 6,000-point level.

Unless that 6,000-point mark breaks and turns into resistance, there is no reason to fear this correction. There’s no indication so far that this will turn into something more serious.

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