Weekly Update S&P 500

Welcome to this week’s analysis of the S&P 500. We had a very solid trading week, slightly shortened due to the Christmas holidays. I hope you all had a great Christmas with your families. The S&P 500 also had a strong holiday week, gaining about 1.3%.

Looking at the 4-hour chart, we can see a very nice push higher starting from the important 6,800-point zone. This level held as support, and from there price advanced steadily throughout the entire week. The index also pushed through the 6,900-point zone, which was another key resistance area. We recorded our first daily close above this level, and the S&P 500 is now trading at new all-time highs again.

After such a strong move, it would be very normal to see a small pullback toward the 6,900-point zone. This would be a healthy retest of former resistance to see whether it can now act as support. I marked this potential retest in red on the chart, with a possible short-term bottom around the 6,900-point area before the market resumes its move higher.

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Strong Holiday Week Pushes S&P 500 to New All-Time Highs

On the daily chart, we can clearly see the rising structure defined by the green, grey, and red shaded areas, which we use as trend lines for this rising wedge. The lower boundary of this structure is marked by the green shaded area, the upper boundary by the red shaded area, and the grey shaded area represents the middle of the formation. With this strong week, price pushed higher within this structure and, as mentioned, moved above the 6,900-point level. Last week we talked about how the 6800-point zone was a decision point. One of the laid out paths was to the upside and this is what materialized with this week’s price action.

I marked three important support and resistance levels on the daily chart for the coming week. First, the 6,900-point zone just below current price, which could be retested as support. Second, the major psychological level at 7,000 points, which is the next significant upside target and an important resistance area. Third, the green shaded area of the wedge formation, which is not immediately relevant now but will become an important support level in the future if price pulls back more deeply.

Overall, the most logical path forward would be a brief retest of 6,900, followed by a continuation higher toward the 7,000-point mark.

Short-Term Risk Outlook

Finally, looking at our short-term risk outlook and buy/sell score: the S&P 500 is shown in black, the buy score in green, and the sell score in red. On the bottom, we have the longer-term chart going back to the 2022 low and the strong rally since then. On the top right, you can see a zoomed-in view of the price action this year, and on the top left, the resulting buy and sell signals generated by the indicator.

On the top-right chart, we can see a strong buy score around 6, which triggered a buy signal — actually two buy signals close together. As expected after such a strong upside move, we can expect a sell score to develop, similar to what happened two weeks ago. I marked this developing sell score in red. Over the coming one to two weeks, it would be normal for this sell score to increase, which could eventually trigger a sell signal. At that point, we would reduce the trading exposure.

On the top-left chart, you can see the last four buy signals, which I marked on the chart. These signals came close together and did an excellent job of capturing the last two market bottoms. These signals were also shared through our free subscription, and it’s good to see them working very well again.

For now, everything looks constructive. After such a strong upside move, a small pullback and some development of the sell score would be normal. We’ll see how this evolves next week.

We also have an article (Update: December 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.