Selling SPX with $6,620 target

The S&P 500 Index (SPX) has been forming wide, flat candles within a general downward trend, a pattern clearly observable on the 15-minute (M15) timeframe. Such formations are typically interpreted as potential reversal signals. Fundamental factors are enough and some to spare. The recent Federal Reserve (Fed) meeting has concluded, and market expectations appear to be fully priced in. Future policy is likely to remain cautious, with little indication of accelerated monetary easing in the near term. Thus, there is limited potential for further upward momentum for the index. Underlying economic challenges continue to pose headwinds. These include a softening US labor market, persistent inflationary pressures, elevated international trade barriers, and ongoing imbalances within global production and supply chains.

Furthermore, capital is flowing out of American stocks at an accelerated pace. Initial signs of this shift emerged earlier in the year when international investors lost interest in domestic assets due to US President Donald Trump's trade policies. A more sustained movement toward diversification is now underway, with a particular focus on European and emerging markets. These regions offer greater predictability in their economic and political landscapes, and their monetary conditions remain accommodative. Diverging returns across territories reinforce this reallocation. Since the start of the year, Asian indices have advanced approximately 14%, and the MSCI Europe has risen over 19%, compared to a gain of just 9% for the US S&P 500. This relative underperformance highlights diminishing prospects for the American market and suggests further downside potential for SPX.

The ultimate recommendation is to sell the S&P 500. Profits are taken at $6,620. Stop loss is placed at $6,650.

The volume of your open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.