SP500 and Nasdaq – Daily Analysis

In today’s technical analysis, we look past the headlines and examine the latest S&P 500 and Nasdaq signals, momentum shifts, market structure, sector behavior, and key technical levels to assess the most probable direction and potential targets.

The focus is on whether today’s weakness damaged the bullish roadmap — or simply reset the short-term structure before the next move. We also review the message from the sectors and the Magnificent 7, as their participation — or lack of it — may become critical in determining whether this is only a temporary pause or the start of a more meaningful shift under the surface.

CANDLES

This is a strange market. I am not sure I have seen something quite like this before. SPX and Nasdaq are bearish. Dow pushed higher, but the candle was not convincing. Russell even made an ATH, but again, the candle build-up looks more bearish than bullish.

SPX and NQ confirmed losses of major support. SPX also confirmed an 8/20 EMA bearish cross, while NQ could follow tomorrow. Dow and Russell have not yet recorded a solid bearish move.

My theory is that market forces are trying to reduce the dependence on Semiconductors, which has grown disproportionately. That would explain the stronger impact on Nasdaq and SPX, while Dow and Russell are still holding up. But that is just a theory.

Meanwhile, sectors are still trying to keep the market together, but the combined weight of Technology and Communication Services is starting to take its toll. There is also a chance of a broader sector breakdown, particularly in Financials. All Magnificent 7 stocks closed the day with bearish signals of various strength. The engine is choking.

So far, the short-term outlook for SPX and NQ is moderately bearish. The mid-term weekly candles are also shaping strongly bearish for these two, unless bulls wake up before Friday.

Nasdaq – Possible Bullish Flag

The Nasdaq map remains unchanged for now. If NQ reverses in the rectangle area, there would be a good chance for the rally to resume. A breakdown below that area would likely signal a larger and more prolonged correction.

Elliott Waves

Last Wave

The red path is aligned with the Nasdaq scenario we just discussed. However, a break below the red rectangle would be a strong bearish signal and could open the door to the development of a higher-degree impulse downward.

At this point, there is no strong technical support for the current wave down being either wave 3 or wave C of some degree. It still can develop that way, but not yet. Considering this uncertainty, I cannot reject the possibility of a larger wave B, as outlined in blue.

A new lower low would likely remove the blue path from the probability map.

SUMMARY

SPX remains moderately bearish in the short term after losing major support and confirming the 8/20 EMA bearish cross. The attempted upside impulse has failed, and the market is now tracking a corrective/downside structure more closely aligned with the Nasdaq scenario.

At the same time, the larger structure is not fully resolved. There is still no strong technical confirmation that the current decline is already wave 3 or wave C of a larger degree. A larger wave B remains possible for now, but a new lower low would likely remove that path from the probability map.

Overall, SPX is vulnerable short-term, while the mid-term weekly setup is still undecided. The key line is the red rectangle: holding it could keep the correction contained; breaking below it would be a much stronger bearish signal.