Are Stocks Forming a Major Topping Pattern?
The S&P 500 pulled back - just a correction of recent gains?
Stock prices pulled back on Monday, with the S&P 500 Index closing 0.79% lower and retracing most of its Wednesday–Thursday rally. On Thursday, the index reached a new record high of 6,284.65, but yesterday it traded as low as 6,201.00. Technically, this appeared to be a pullback toward the 6,200 level. The market reacted to renewed tariff-related concerns.
This morning, the S&P 500 is expected to open 0.1% higher, as indicated by futures contracts. The market appears to be entering a short-term consolidation.
Investor sentiment has improved significantly, as reflected in Wednesday’s AAII Investor Sentiment Survey, which reported that 45.0% of individual investors are bullish, while 33.1% are bearish.
The S&P 500 is fluctuating following its recent advances, as the daily chart indicates.
S&P 500 Futures - Short-Term Consolidation
This morning, the S&P 500 futures contract is trading near the 6,280 level after rebounding from yesterday’s intraday low of around 6,247. Resistance remains in the 6,300–6,320 range, while support is near 6,250.
Markets remain highly sensitive to geopolitical developments and could stay volatile in the near term.
Conclusion
Stocks are likely to open flat today, with the S&P 500 moving sideways after rebounding from the 6,200 level. The index remains near its all-time high, with no clear bearish signals at this time. However, a more pronounced round of profit-taking could still occur in the near term.
Last Tuesday, I noted “I think that in the short term, overbought technical conditions may lead to a period of consolidation or a mild pullback. However, no clear bearish signals are currently evident”. That outlook remains valid.
Here’s the breakdown:
- The S&P 500 has entered a phase of uncertainty and consolidation, pulling back to around 6,200 on Monday.
- The recent rally extended gains for those who bought based on my Volatility Breakout System.
- There are no clear bearish signals yet, but a deeper downward correction is not out of the question at some point.
The full version of today’s analysis - today’s Stock Trading Alert - includes the additional stock trading ideas and the current S&P 500 position. I encourage you to subscribe and read the details today (with a single-time 7-day free trial). Stock Trading Alerts are also a part of our Diamond Package that includes Gold Trading Alerts and Oil Trading Alerts.
And if you’re not yet on our free mailing list, I strongly encourage you to join it - you’ll stay up-to-date with our free analyses that will still put you ahead of 99% of investors that don’t have access to this information. Join our free stock newsletter today.
Thank you.
Paul Rejczak
Stock Trading Strategist
Recommended for You
- Tax-Optimized Legacy Planning: How Physical Gold IRAs Work in 2025 Learn how forward-thinking investors are protecting generational wealth through tax-advantaged precious metals strategies that function independently of market volatility.
- Volatility Breakout System: Paul's Proprietary Trading Approach Discover how this market-tested trading system has outperformed the S&P 500 by identifying key turning points and generating precise entry signals.