The S&P 500 has moved lower since the January highs and remains under pressure, with a gap down this week changing the prior technical view. The move is now described as a fifth wave within a higher degree corrective pattern.<\/p>\n
If this scenario holds, the decline could extend towards the 6,370 to 6,500 support area, with 6,772 acting as a key level. A move that overlaps and closes above 6,772 would invalidate the view of a bearish incomplete impulse within wave C from a larger wave B triangle.<\/p>\n
A gap around 6,700 from Sunday is also flagged as possible resistance early in the week. A rebound towards 6,700 followed by another drop would still align with the bearish setup.<\/p>\n
For a more bullish read, one approach is to wait for the drop from 6,970 to finish. Another is to wait for an overlap and a daily close above 6,772, which would indicate that a low may already be in place.<\/p>\n
We believe the upward momentum from the January 2026 highs has ended, and the S&P 500 is now in a larger corrective pattern. The VIX, often called the market’s fear gauge, has just climbed above 25, reflecting a significant increase in trader anxiety. This suggests that simply buying this dip may be a risky strategy in the immediate future.<\/p>\n
The pressure on stocks is being magnified by growing geopolitical risks in the Middle East, along with last month’s hotter-than-expected CPI report which has dampened hopes for near-term rate cuts from the Federal Reserve. We see this combination of factors supporting a continued move lower for the index. The decline in the S&P 500 is now over 8% from its peak earlier this year.<\/p>\n
Given this outlook, derivative traders could position for a drop toward the 6370 to 6500 support area, potentially using put options or bear put spreads. The recent CBOE put\/call ratio hitting 1.15, a high not seen since the pullback in the fall of 2025, indicates many are already preparing for further weakness. These bearish strategies would be invalidated if the market manages a daily close above the 6772 resistance level.<\/p>\n
In the immediate short term, we are watching the resistance level around 6700. A bounce to this area that fails and turns back down would be a strong signal that the bearish trend remains intact. This could present a favorable entry point for traders to initiate or add to short positions.<\/p>\n
For those looking for a bullish reversal, it seems prudent to wait for more confirmation. One option is to wait for the decline to fully play out and find support in the 6370-6500 zone. Alternatively, a decisive break and close above 6772 would signal that a low might already be in place, though time feels to be running out for this scenario.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" S&P 500 declines from January highs; fifth-wave correction targets 6,370\u20136,500, with 6,772 breakout invalidating bearish view.<\/p>\n","protected":false},"author":103,"featured_media":16991,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-51021","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/51021","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=51021"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/51021\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16991"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=51021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=51021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=51021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}