S&P 500 forecast: Index struggles below 5,600 amid strong bearish momentum
S&P 500 remains in a strong downtrend as sellers dominate below key resistance levels
The S&P 500 index continues its downtrend, trading at 5,521.53, reflecting a 9.9% drop from its peak of 6,133. The index has faced persistent selling pressure, with a lower-high, lower-low formation signaling strong bearish momentum.
The recent rejection at 5,700 resistance has reinforced the dominance of sellers, while support at 5,500 remains a crucial level to watch.
S&P 500 price dynamics (Oct 2024 - Feb 2025) Source: TradingView.
Key resistance zones and potential downside risks
The S&P 500 has been trapped within a descending trendline, with multiple rejection points confirming that sellers are firmly in control. Immediate resistance stands at 5,700–5,750, while the next significant supply zones are at 5,900–5,950 and 6,047–6,133. Without a substantial shift in momentum, revisiting these higher levels remains unlikely.
On the downside, 5,500 remains a key psychological support, followed by 5,450, which has acted as a bounce point previously. If selling pressure intensifies, the index could test 5,350, a level where some institutional buying might emerge. A break below this could open the door to 5,200, last seen in mid-2024.
Technical indicators confirm sustained weakness
The Exponential Moving Averages (EMAs) confirm strong bearish momentum, with the 20 EMA at 5,699, 50 EMA at 5,840, 100 EMA at 5,904, and 200 EMA at 5,879. The price is trading below all major EMAs, reinforcing the bearish outlook. A reclaim of the 50 EMA at 5,840 would be the first sign of recovery, though it remains a distant target for now.
The Relative Strength Index (RSI) at 28.78 suggests oversold conditions, indicating the potential for a short-term relief rally. However, the daily RSI also remains below 30, which means bearish momentum is still dominant. The MACD indicator remains in deep negative territory, with no clear signs of reversal, further confirming the downside bias.
Market outlook: Caution remains amid bearish dominance
The S&P 500's overall structure remains bearish, with selling volume increasing as institutional investors reduce exposure. A potential relief rally toward 5,650–5,700 is possible due to oversold conditions, but unless the index reclaims 5,840, any upside is likely to be short-lived. Failure to break above 5,600 would signal further downside, with 5,450 and 5,350 as the next key support levels.
The S&P 500’s current trend aligns with prior discussions, where we highlighted the risk of a deeper correction amid institutional selling and macroeconomic uncertainties. With price action confirming the bearish breakdown below key levels, the index remains vulnerable to further downside unless buyers step in decisively.
