SP500 – Weekly Report

Candles

SPX remains in a tough spot. On one hand, the weekly and larger frames are firmly bearish, with the weekly failing to form a bottom for three consecutive weeks, further eroding the bulls’ chances. On the other hand, the daily and 3-day frames are bullish, keeping the possibility of a short-term rally alive. The weekly frame is also approaching the 50 DMA, a move we discussed last week, and this line is expected to act as strong resistance.

On the monthly frame, SPX would need to rally about 5% in the next three days to shift the current bearish-neutral candle into a bullish one. While this move is possible, it will depend heavily on how the mid- and long-term odds evolve over the final days of the month.

For now, SPX holds a short-term bullish outlook but remains increasingly bearish over the mid- and long-term frames.

MACD
(no changes, just a refreshed chart)

SPX has indeed opened April with a monthly MACD bearish cross, bringing all four major indices into alignment.

What makes this development particularly significant is the magnitude of the cross. If confirmed by the end of April, it would be the largest on record—approximately 10% greater than the previous major cross. Historically, MACD crosses of this scale have been followed by substantial market declines.

If the market reacts in proportion to past patterns, SPX could be heading toward the $4,300 area before establishing a meaningful bottom. However, given the recent chain of events, lower levels cannot be ruled out.

ELLIOTT WAVES

Double Diagonal
(no changes in this section, just an updated chart)

I kept this old chart we last discussed in November on the back burner. I still believe that, due to the highly unusual structure of the waves since October 2022—far from what’s expected in a normal impulse—the index could be forming a Double Ending Diagonal of massive scale.

If SPX breaks below 4808.25 (the 2022 high), it would technically invalidate the higher-degree impulse in blue. In that case, be prepared for a potential drop toward the $3500 area.

Worth noting: both Nasdaq and Dow Jones have already pushed their waves below their respective 2022 highs, so there’s a strong chance SP500 follows suit. Let’s see how the next week unfolds.

Long Term

The hypothesis about the diagonals aligns well with the long-term chart we’ve been tracking since January. A break below $4818.62 would invalidate the green count and elevate the purple count to primary status.

It’s worth noting that the cash index chart is less decisive compared to the futures. In this case, the ending diagonals offer a clearer structure and are more effective for setting downside targets.

Short Term

SPX is possibly close to completing either wave (B) in red or wave A of (B) in purple.

SUMMARY

The S&P 500 remains bearish overall and has further reinforced its bearish stance on the mid-term frames. At the same time, the index has maintained a bullish tone on the short-term frames, with potential to extend the current bounce — though the bearish pressure from the larger frames may soon become overwhelming.

While the candles remain locked in a technical standoff, long-term indicators continue to align for a potential deeper decline. There is strong technical agreement across all major indices, as discussed in the weekly video and related index reports.

From an Elliott Wave perspective, a break below the 2022 high for both the index and futures would invalidate the major long-term impulsive structure. Under the Double Ending Diagonal hypothesis, a move toward the $3,500 area would not be surprising. So far, the waves upward have been corrective in nature, pointing to higher odds of new lower lows—regardless of which path ultimately unfolds.

The upcoming monthly, 2-month, and 4-month closures are positioned to provide critical guidance for the next few quarters.