Weekly Update S&P 500

Welcome to our weekly newsletter on the S&P 500. I’m writing this before the New York market open on Friday, so the final trading day of the week is not yet included. So far, the S&P 500 is down about 0.3% for the week.

Looking at the 4-hour chart, we can see that we already experienced a sharp drop last Friday, which then continued throughout the week until Thursday. In total, this move amounted to a decline of roughly 2.8% from peak to trough. Last week, we discussed the importance of the 6,900-point zone and the need for it to flip into support. That attempt failed — I marked this rejection in red on the chart — and prices subsequently slid lower, even breaking below the strong 6,800-point support zone.

On the 4-hour chart, we can now draw a black trend line that price has just managed to break above. It remains to be seen whether this breakout can hold into the weekly close. The violation of the 6,800-point zone earlier in the week is, for now, off the table, as prices are attempting to reclaim this level as support.

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Price Action Stuck in Wide Range Between 6,500 and 6,900

On the daily chart, it’s clear that we are at a very important decision point. The strong 6,800-point support zone and the green shaded trend line of the expanding formation are converging right where price is trading now. Either this area flips back into support, allowing the index to move higher again toward 6,900, or we fail here and the next downside target would be the 6,700-point zone. I marked both scenarios in red on the chart.

In general, it’s clear that since October, price action has been moving sideways in a wide range between roughly 6,500 and 6,900. A revisit of either side of this range over the coming weeks would not be surprising. The bigger question, however, is whether this sideways movement since October represents a large consolidation phase that is building energy for the next leg higher beyond 7,000, or whether it marks exhaustion and early signs of weakness after the very strong bull run from the April low. Only time will tell, but this is definitely a critical area to watch closely.

Short-Term Risk Outlook

Looking at the short-term buy and sell score, the S&P 500 is shown in black, the buy score in green, and the sell score in red. On the lower chart, we see the data going back to the major bottom in October 2022, while the top-right section shows a zoomed-in view of this year. There was a modest sell score over the past two weeks, but with Thursday’s price action, a buy score started to build. This triggered a buy signal and suggests that the bottom of this short-term decline may already be in.

In the top-left section, you can see the buy and sell signals generated throughout this year, including the recent ones, which captured the November low very well. Overall, the buy and sell score remains constructive for the S&P 500 and points to higher prices in the coming weeks.

That said, the next two weeks typically see very light trading volume due to the Christmas holidays, which means the market can be more vulnerable to higher volatility in both directions during this period.

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

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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.

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.