Stocks Poised to Extend Consolidation – What’s Next?

Paul-Rejczak Paul Rejczak Jun 20, 2025

The S&P 500 is set to open slightly higher - are we getting closer to a breakout?

 

Stocks extended their consolidation on Wednesday, with the S&P 500 index closing 0.03% lower. On Thursday, the S&P 500 futures contract pulled back but is rebounding this morning, indicating a 0.1% higher opening for the index. The market continues to react to ongoing developments in the Middle East conflict.

In my opinion, this remains a short-term consolidation phase, with no confirmed bearish signals at the moment.

Investor sentiment has slightly deteriorated, as reflected in the Wednesday’s AAII Investor Sentiment Survey, which reported that 33.2% of individual investors are bullish, while 41.4% are bearish.

The S&P 500 continues to hover around the 6,000 level, as the daily chart indicates.

Stocks Poised to Extend Consolidation – What’s Next? - Image 1

 

Nasdaq 100 Faces Continued Fluctuations

The Nasdaq 100 was unchanged on Wednesday, and this morning, it is expected to open 0.1% higher. Key support remains around 21,500, with resistance in the 22,000–22,200 range.

Stocks Poised to Extend Consolidation – What’s Next? - Image 2

 

VIX Remains Elevated Above 20

Last Wednesday, the Volatility Index (VIX) dropped to a local low of 16.23, reflecting reduced investor fear. However, by Friday, it rebounded to a local high of 22.00 amid rising Middle East tensions. On both Tuesday and Wednesday, the VIX approached the 22 level again.

Historically, a dropping VIX indicates less fear in the market, and rising VIX accompanies stock market downturns. However, the lower the VIX, the higher the probability of the market’s downward reversal. Conversely, the higher the VIX, the higher the probability of the market’s upward reversal.

Stocks Poised to Extend Consolidation – What’s Next? - Image 3

 

S&P 500 Futures Contract Rebounds Above 6,000

This morning, the S&P 500 futures contract is rebounding from its overnight low of around 5,970. Key support remains in the 5,970–6,000 zone, marked by recent local lows. Resistance is around the 6,100 level. The market is likely to remain sensitive to geopolitical news and may extend a consolidation.

Stocks Poised to Extend Consolidation – What’s Next? - Image 4

 

Conclusion

Friday’s trading session is expected to open slightly higher for the S&P 500 index, following reports suggesting the Middle East conflict may be nearing a resolution - or at least a temporary ceasefire. Investors are also closely watching the Quadruple Witching event today, which could drive increased volatility and trading activity.

 

Here’s the breakdown:

  • The S&P 500 continues its short-term consolidation around the 6,000 level despite geopolitical tensions.
  • There are no clear bearish signals yet, but a deeper downward correction is not out of the question at some point.


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Thank you.

Paul Rejczak
Stock Trading Strategist

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