Buying SPX on dip toward $6,810

With only five trading sessions left in the year, the S&P 500 Index (SPX) is knocking on the door of all-time highs. The seasonal backdrop is leaning bullish, pointing toward a slow yet steady grind higher.

Statistics are in the buyers' corner: the final week of December and the first two days of January have historically been a tailwind for stocks. Therefore, institutional players are now putting the final touches on their "window dressing" reports, while retail investors are placing bets on a strong start to 2026. 

Last week's US inflation reading doubled down on the disinflation narrative toward the Federal Reserve (Fed)'s 2% target, feeding confidence that the regulator could step on the gas with interest rate cuts starting next quarter. 

Concurrently, AI momentum remains a pillar of support, with tech giants like NVIDIA, Microsoft, and Apple embedding artificial intelligence into their business workflows and helping to prop up the index through thin periods.

The Fed's December decision to hold on at 4.50–4.75% came with a notably softer tone from Chairman Jerome Powell. Traders are now seeing a 75% chance to a 25-basis-point rate cut in February 2026. As it stands, the central bank's quantitative tightening (QT) runoff is still underway, though it has slowed to a trickle, thus leaving ample liquidity to keep the major capital stock rally alive.

Right now, the Fear & Greed Index is deep in "Extreme Greed" territory (78–82)—a classic year-end staple that also signals overbrought market conditions. Meanwhile, retail optimism is at its six-month high. Behind the scenes, high Positive Gamma is keeping a lid on volatility—every dip is being swiftly scooped up.

Looking at the options landscape, a "Call Wall" at $6,100 poses the biggest hurdle. Heavy open interest makes a clean breakout unlikely before January without a fresh catalyst. On the downside, a thick "Put Support" at $5,900 offers a solid backstop for any profit-taking.

In fact, the most probable path for SPX through year-end is a slow, upward drift. The upside appears capped at 1.5–2% from here, since much of the positive momentum was front-loaded in November and December. Keep in mind that the S&P 500 Index—and the broader market—is ripe for a pullback. The purchasing window closes as the calendar flips. 

The ultimate recommendation is to buy SPX from $6,810. Lock in profits at $6,900. Set Stop Loss at $6,750.

Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow entering a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.