Was Monday’s sell-off the last one? Will the market reverse its downtrend?
The S&P 500 Index accelerated its downtrend on Monday, closing 2.70% lower after rebounding from a new local low of 5,564.02 - its lowest level since September 12. Sentiment worsened over the weekend following Donald Trump’s comments on a possible recession caused by tariff policies.
Today, the S&P 500 is expected to open 0.2% higher, likely retracing some of its recent decline or consolidating. Investors are awaiting the JOLTS Job Openings release at 10:00 a.m.
Investor sentiment remains weak, as shown in last Wednesday’s AAII Investor Sentiment Survey, which reported that only 19.3% of individual investors are bullish, while 57.1% of them are bearish.
The S&P 500 continues to trade in a clear downtrend, as we can see on the daily chart.
S&P 500 Futures Contract: Rebound Attempt
This morning, the S&P 500 futures contract is trading near 5,650 after rebounding from yesterday’s low of 5,558. Resistance is at 5,680–5,700, while the support is at 5,560, among others.
The contract continues to trade well below its downward trendline.
Conclusion
Monday’s session brought sharp declines for the stock market. Today, the market is set to open slightly higher, but uncertainty is likely to persist. Investors are awaiting the jobs data today and the key consumer inflation report tomorrow.
Is the market headed much lower? Given rising geopolitical uncertainty and worsening investor sentiment, no clear positive signals are evident. It seems the bull market may be due for a longer pause.
Quoting my Stock Price Forecast for March 2025 “the stock market is poised for a positive start to the month, though this may simply be another part of its medium-term consolidation. The S&P 500 keeps fluctuating following its post-election rally.”
For now, my short-term outlook is neutral.
Here’s the breakdown:
- The S&P 500 accelerated its downtrend on Monday as recession fears intensified.
- The stock market is still seeing increased volatility following the post-election rally.
- In my opinion, the short-term outlook is neutral.
The full version of today’s analysis - today’s Stock Trading Alert - is bigger than what you read above, and it includes the current S&P 500 futures contract position. I encourage you to subscribe and read the details today (with a single-time 16-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