In today’s technical analysis, we turn our attention to the S&P 500, which is flashing warning signs across multiple timeframes.
Last week, we discussed the bearish engulfing pattern on NASDAQ’s daily chart. Now, a similar—but even more serious—signal has appeared on the weekly chart of the S&P 500. A large bearish engulfing candle, highlighted by a red rectangle, has formed—signaling potential for a deeper correction.
Although Monday opened with a slight rebound, the outlook remains fragile. If the price abandons this early upswing and sets a new low below last week’s candle, it would confirm the bearish engulfing pattern and trigger a strong sell signal.
The first key level to watch is the green horizontal support, which previously acted as resistance throughout 2024 and early 2025. It’s a logical first target for the bears. A break below that level would open the door to even deeper losses.
For now, sentiment on the S&P 500 is negative, and pressure is building. Bulls must hold current levels to prevent a broader downturn.