Hello and welcome to our big picture analysis of the S&P 500. We’re starting here by looking at the monthly and weekly candle charts.
We begin with the long-term trend from 2008 to today. We’re in a very clean rising trend channel, which gives us a good sense of the overall structure. To better understand the significance of certain price levels, we’ve highlighted areas on the chart: green, red, and gray shaded zones acting as trend lines.
The green shaded area represents support, found at the bottom of the trend channel. The red shaded area marks resistance, at the top. The gray shaded area runs through the middle of the channel, often acting as a balance point or intermediate support/resistance.
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Weekly Candle Signals First Major Pullback Since April
Now, let’s switch to the weekly chart, where things get interesting.
This is, of course, the same long-term trend channel, originating from the 2009 low, again using the green, red, and gray shaded areas. On the left side of the chart, we see the 2022 top, followed by the 2022 low. Notice how the green shaded area provided excellent support at the low.
From there, prices rallied into the February 2025 high, and throughout that move, they respected the gray shaded area as resistance and support. Then came a sharp correction in April, which again found strong support at the green shaded area.
Following that bounce, prices pierced through the gray shaded area again, and now we’re seeing the first significant weekly red candle — a sign that we may be entering a pullback phase.
So, based on that, we expect prices to pull back again, potentially finding support in the gray shaded area once more.
Now, still looking at the weekly chart, we can also draw an additional, shorter-term trend channel, starting from the 2022 low. Within this shorter channel we again see a gray shaded area, where price was recently rejected, as marked by the red circle on the chart. This shorter-term trend channel also has its own green shaded support area, which interestingly aligns with the gray shaded area from the longer-term trend channel (since 2009).
At the intersection of the green support of the short-term channel and the gray midline of the long-term channel (also marked with a red circle), we have a confluence zone — a highly significant area for potential price reaction.
So, we’re now expecting a pullback into that gray shaded area, which would also serve as a test of both:
- the long-term trend’s balance zone, and
- the support line of the short-term trend channel.
This confluence makes it a particularly interesting level to watch.
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