Weekly Update S&P 500

Hello everybody, and welcome to this week’s analysis on the S&P 500. The index had a very strong week, up around 3.5%. Looking at the 4-hour chart, we can see that last Friday the S&P 500 formed its bottom after the sharp drop on Thursday. The low from Friday, which I marked in red around the 6,500-point zone, was the capitulation point. As mentioned last week, this zone was a nice confluence of the strong 6,500 support level and the lower boundary of the trend channel that had guided the move downward.

From that low, the market rallied strongly. After Friday’s bottom, we saw continuation on Monday and Tuesday. On Tuesday, the S&P 500 broke out of the downward-sloping trend channel, which I marked with a red X on the chart. Just one day later, on Wednesday, it also broke through the very important 6,800-point resistance zone. On Thursday, we had a slight retest of that level, and on Friday the market pushed higher again, closing the week strongly above 6,800 — which now should act as support.

In the short term, the S&P 500 is overbought, so a small pullback or consolidation would be normal, but not a major reversal. The overall direction is higher, and the correction appears to be over for now. The next resistance is around the 6,900-point zone, which lines up with the last two peaks — both marked in red on the chart. Those peaks also occurred around 6,900, so it is logical to expect some resistance there. I marked this potential resistance area with red question marks. A possible scenario could be a pullback from that zone and a retest of 6,800, but likely nothing more than a small breather.

Are you wondering when to buy the S&P 500 as an investor? Join our community of smart do-it-yourself investors who are making informed decisions with our expert insights, just by signing up with your email!

Get started today with our free financial guide! Just enter your email, and you’ll start receiving our most popular Simple Guide with exclusive market signals right in your inbox.

S&P 500 Eyes the 6,900-Level Confluence Zone

Looking at the daily chart, we see that the S&P 500 is now back inside the expanding structure defined by the green, grey, and red shaded areas. This expanding formation has been on the chart for several weeks. As mentioned on the 4-hour chart, the area around 6,900 is important because of the previous highs, and now we can also see that the grey shaded trend-line zone of the expanding formation aligns with that same level. That creates another confluence of resistance. It would make sense to see some consolidation there and potentially a move back to retest the 6,800 support zone. We’ll see next week if that scenario plays out, but some short-term consolidation should be expected.

Short-Term Risk Outlook

Finally, looking at the short-term buy and sell scores: the S&P 500 is shown in black, the buy score in green, and the sell score in red. At the top, we have a zoomed-in view showing this year’s price action, including the major April low. In the top-right corner, you can see the recent buy signals. I marked the three buy signals we received over the last two weeks, which were well-timed and aligned closely with the market lows. The strong rally now confirms that these were valid signals.

Last week I mentioned that when the buy score moves above 5, it usually marks a bottom. This week, more signals lined up and we reached a buy score of 11. This does not necessarily mean that the upside will be stronger, but it shows that more individual signals confirmed each other, which increases the probability of a successful buy signal. When more signals align, the chance of a false signal becomes very low.

For now, the outlook remains bullish according to the buy score. The score will drop off over the next days, and if it rises again later, that would trigger another buy signal — but for that to happen, we would need some consolidation first. Structurally, everything looks fine, and there is no indication of a major crash on the horizon. Sentiment indicators are still very bearish, which is a strong contrarian sign and typically supports further upside. We will see how far this rally can extend from here.

We also have an article (Update: November 25, 2025) on the broader S&P 500 outlook. From a big-picture perspective, the technicals on the weekly chart are less positive and suggest that another correction could be developing in the coming 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

Stay ahead of the market! Sign up for our weekly updates and get additional expert insights on the S&P 500, key support levels, and market trends.

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.

In April, however, we experienced a sharp correction. That move doesn’t align perfectly with the usual seasonal pattern, but it may have represented the weakness that typically shows up in May or June arriving a bit earlier than usual. From that April low, the market rallied strongly through the summer, continuing higher into late July — a period that generally aligns well with historical seasonality.

However, the typical seasonal soft spot in August and September didn’t really appear this year. Usually, those two months bring some volatility or a correction phase, but the S&P 500 instead continued to trade with strength, avoiding any meaningful pullback.

Looking ahead to the remainder of the year — October, November, and December — these months are historically the strongest period of the year for the S&P 500. But given that we’ve already seen such a strong summer rally and skipped the usual correction phase, it’s reasonable to expect that some of that weakness may still be due.

In other words, the correction that typically occurs in late summer might simply have been delayed rather than avoided altogether. That means we could see it emerge in October or November before the market resumes its usual year-end strength.

Seasonality isn’t a perfect roadmap — it rarely plays out exactly the same way each year. But it does offer useful context. Right now, it suggests that while the broader trend remains positive into year-end, a short-term correction could still unfold before the next strong push higher into December.

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.

Track Market Risk with Our Dashboard

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.