Weekly Update S&P 500

Hello everybody, welcome to this week’s analysis of the S&P 500. The S&P 500 lost 1.4% this week. We saw relatively stable consolidation below the 7,000-point zone during most of the week, followed by another test of the 7,000 resistance on Thursday. After that, the market dropped sharply and made a low on Friday, testing the key support zone around 6,800. The S&P 500 therefore continues to range between these two very important levels.

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S&P 500 Rejected at 7,000, Support at 6,800 Holds

When we look at the daily chart discussed last week, you can see that we outlined the 6,800-point zone as potential support and the 7,000-point zone as resistance. Including this week’s price action, these levels once again played out very precisely. The market topped out around 7,000 and then declined all the way down to 6,800, which for now is acting as support.

One concerning aspect is that when we formed the top near 7,000 this week, price did not fully reach the upper red-shaded area of our trend channel. There is a small gap between the high and the upper boundary of the channel, which I marked on the chart. This could indicate some underlying weakness, as the index was not able to push all the way to the top of the trend channel. In addition, we did not make a new all-time high, which in the past was often seen before another pullback. This could also be interpreted as a sign of weakness.

For the coming week, I marked the important support and resistance levels again with red lines. The 7,000-point zone remains the key resistance. On the downside, the 6,800-point zone is the immediate support, as we are currently trading around this level. If that level breaks, the next potential support is the green-shaded area of the rising trend channel, slightly above the 6,600-point zone, which should provide additional support.

Risk Outlook

Now let’s look at the risk outlook. First, the short-term risk indicator shows the S&P 500 at the bottom, with sell scores in red and buy scores in green. In the top right, you see a zoomed-in version, and in the top left, the buy and sell signals generated by the indicator.

This week, not much changed. Some minor signals were triggered, but they had no significant impact on the overall indicator. As a result, the buy and sell scores remained relatively stable throughout the week. We now need to wait for stronger signals to enter the indicator before we get a new meaningful buy or sell signal. If you are interested in receiving these buy and sell signals, you can sign up for our free newsletter, where we provide them during the week.

Looking at the mid-term risk outlook, nothing has changed either. The S&P 500 remains in the grey-shaded area, which indicates a low-risk environment, though not an extremely low-risk one. For now, we continue to monitor the situation and will adjust our positioning once the indicator signals a shift in risk conditions.

We also have an article (Update: January 20, 2026) 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 2026

When we look at the seasonality of the S&P 500, the last quarter of 2025 did not line up very well with the typical seasonal pattern. That’s not a problem, though — seasonality should be seen more like a weather model. It gives us a possible direction the market could take, not a precise forecast.

We did see weakness in October, which actually matched the seasonal pattern, as seasonality often points to a softer October. However, we did not get the strong year-end rally that seasonality would normally suggest.

Looking ahead to the first quarter of 2026, the seasonal pattern points to potential weakness in January, followed by rising prices in February, with a possible peak during that month. After that, seasonality suggests renewed weakness into March to start the year. We’ll have to see whether the market follows this pattern.

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.