Weekly Update S&P 500

Hello everybody, and welcome to this week’s analysis on the S&P 500. It was quite a volatile week. After the very strong bounce last Friday, the S&P 500 continued that strength into the start of this week. On the 4-hour chart, we can see how the index was able to break out of the declining trend channel — shown by the black trend lines. I also marked the breakout on the chart.
From there, the S&P 500 pushed through the 6,800 zone and climbed all the way toward 6,900 points, where it met resistance. I marked that level in red on the chart. After hitting that ceiling, the market reversed and we saw a sharp decline on Thursday and into Friday — more than 3% over those two days.

However, the index again found support, which I also marked in red, and then staged a very strong rebound on Friday. Overall, despite all this volatility — strong swing up and strong swing down — the week ended roughly unchanged, with no gain and no loss.

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Expanding Wedge Holds Support for the Sixth Time

On the daily chart, we discussed the expanding formation that has been developing. Last week, I showed this using black trend lines; this week I switched to the green, grey, and red shaded areas, but the concept is the same.
You can see how this week’s drop once again found support exactly at the green shaded area — the lower boundary of the expanding wedge. This is now the sixth time that this green zone has provided strong support.However, there are a few technical concerns. First, we talked about the importance of the 6,800-point zone and how the index needed to stay above it. Although we moved above that level during the week, we slipped back below it by the weekly close, which is not ideal.
Second, after every previous test of the green shaded support area, price was able to move all the way up to the red shaded area at the top of the formation before reversing again. But this time — and also once in mid-October — we tested the green support twice without reaching the upper red zone.

This week, we even saw a very strong downward candle on Thursday — I marked this with an exclamation mark — which highlights the weakness. So this is a bit concerning.
Still, as long as the price holds above the green support zone, the expanding formation remains intact. But for renewed upside confirmation, the index needs to reclaim the 6,800-point area.

Short-Term Risk Outlook

Finally, looking at the short-term buy and sell score, I added a zoomed-in view at the top. Last week, we had a buy signal with a buy score around 6 or 7 — which typically indicates that a dip like this may offer a short-term buying opportunity. This high buy score persisted also during this week.
On the lower part of the chart, you can also see that in the past, whenever the buy score moved above 5, it often marked a good point to buy. That’s what the indicator is suggesting now.
Of course, on the weekly timeframe the S&P 500 remains very overbought, so I wouldn’t expect significant long-term upside from here. This is more of a short-term perspective for the next two to three weeks. For that time frame, the short-term buy/sell score suggests more potential upside.

We also have an article (Update: October 30, 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.

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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.

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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.