SPX Review and Outlook

EOW Stats

High: 6,850.86
Low: 6,630.70
Close: 6,849.08
Change: +3.73%
ATH: 6,920.34 (Oct 29)

I don’t want to belabor the zoomed-out view, but I do want to start with a quick top-down check before getting into this week’s scenarios. The selling that showed up at the end of October was mostly absorbed this week, and there was a noticeable shift from continuation down, to buyers stepping back in.

I’m leaning back toward a neutral (wait and see) sentiment for now, and I want to show you what I’m seeing on the monthly and weekly charts before we move into the smaller time frames.

Monthly View

On the monthly chart, the SRSI uncrossed, and the candle recovered almost the entire decline from earlier in November. So instead of following through lower, buyers stepped in and shifted the tone for the month.

If sellers show up again in December, then we can revisit the idea of a larger decline, but based on this month alone, the downside didn’t follow through.

Weekly View

On the weekly chart, I shaded the zone from early September to show how the price action has really just been moving sideways. We dipped into the lower end of that box mid-November and found support at the weekly 20 EMA. This past week we reclaimed most of the November decline.

The SRSI on the weekly has reset and turned back up, and while it hasn’t crossed yet, the shift in direction is there. The range has been roughly 6,550 to 6,900, and the broader uptrend has stayed intact throughout this entire move.

If this bounce continues, the next question is whether we can break through the ATH from October 29. If this bounce fails, then losing the weekly 20 EMA would open up the lower levels again.

Next Week’s Scenarios

We got a strong bounce off the November 21st low, pushed back above the moving averages, and my downtrend line. Now we’re sitting right under a cluster of prior highs, which means this is a “wait and see” area, as we still haven’t cleared the prior peaks from November 12th and October 29th.

So the question now is whether Friday’s candle becomes another lower high, or if we’ll push toward the ATH area and hold.

Here are the paths I’m watching:

Scenario 1: Early-week push, then a retest (bullish to neutral)

A small gap up or early-week push is totally possible, especially with how sharp the bounce was from 6,521. But from there, I think we may retest the rising moving averages, either directly or through some sideways digestion.

Upside → Retest scenario checkpoints:

• Break above the midline (Nov 12th high near 6,869)

• Retest area 6,770–6,800 or toward the daily MAs
  (This can happen through sideways chop or a controlled pullback)

• Hold the MAs → rebuild for another push higher

And, I also think we could see this scenario in reverse, a chopping or digestion of last week’s rise before pushing to ATH territory.

What chop would look like:

• A few days of sideways movement

• Small pullbacks toward the moving averages

• Intraday stalls or dojis while buyers gather steam

• A tighter range forming before a clean push up or down

This would simply let the moving averages catch up before the next move.

Scenario 2: Failure of the bounce → controlled decline

If this bounce was driven more by short-covering than real accumulation, we’d see price come back through that trendline and lose the shorter-term moving averages again. That would tell me buyers were stepping in to cover, not to build a larger position.

Downside checkpoints:

• Lose the uptrend line we just reclaimed

• Slip back under 6,763

• Break back below the moving averages

• Structure shifts back into a stair-step decline

• Targets: 6,700 → 6,650

This wouldn’t look like the sharp selloffs of February, but a slower decline, more reminiscent of a bear market — lower highs, lower lows, and pockets of green in between. This scenario could also be a part of a continued distribution phase (as described previously here) and a rollover from last week could mean we are preparing for a longer decline.

If I Had to Sum Up My Personal Take on the Week Ahead in One Run-On Sentence:

I think we could get an early-week push and even break the ATH, but I still don’t fully trust this rise and can see us drifting or rolling back toward the 6,785-6,800 area afterward, which may turn into a stretch of chop before the next directional move is decided.

Scenario Mapping

It’s definitely challenging trying to map out the day-to-day scenarios because so much of it is contingent on how price behaves around certain levels. I try to jot a few things down without overthinking it, because sometimes I really don’t have a clue what we might do. But the process of mapping and marking up my charts keeps my eye sharp and helps me continue to grow as a technical analyst.

After I do my top-down analysis, I go all the way down to my smaller time frames to think through what I’m seeing, like a day trader would. Between the 5-minute, hourly, and daily, I’ll jot down and mark up key areas. That’s really all I can do before the market opens and does whatever it’s going to do.

When I map out scenarios, here are the things I look at:

• What sits directly above and below price
  (the next obvious areas price can move into)

• The nearest support and resistance zones
  (horizontal, structural, and pattern-based)

• How price behaved the last time we were in a similar spot
  (recent reactions, wicks, gaps, rejections)

• Any trendlines or shaded zones that add context
  (compression, bases, prior pivots)

• The trajectory, slope, and distance of the moving averages
  (are they rising, flattening, accelerating downward, and where is price in relation to them)

• Whether any bias is sneaking in
  (bullish or bearish expectations that aren’t in the chart)

• Which levels confirm or invalidate the path I’m leaning toward
  (what must hold, what must break)

So I’m really just laying out the paths that make the most sense, and then letting the charts unfold.

Plan the levels. Trade what shows up.

Emanuela