S&P 500’s exit from triangle may trigger correction down to 6,810

Last week was quite productive for the S&P 500 Index (SPX): it reached a new all-time high before pulling back slightly. The lower boundary of a converging triangle—a pattern forming since late November—prevented a full-fledged correction. However, today’s derivative trading signals a risk of breaking through the bottom of the figure, exerting additional pressure on the US stock market. With Monday’s session closed, traders will have ample time to prepare for a potential surge in volatility tomorrow.

Based on futures quotes, SPX is poised to decline to the 23.6% Fibonacci retracement (6,880). If bulls fail to seize the initiative and swiftly bring prices back into the triangle, a tempting opportunity to open short positions may emerge before bears. The 50-day moving average presents the nearest resistance for sellers. A sustained break below this level could open the way toward the 38.2% Fibonacci retracement  (6,810). Technical indicators are looking down, confirming a further correction.

Since trade tariffs returned to the agenda at the beginning of 2026, the S&P 500 Index has lost all of its earlier gains. Last weekend, US President Donald Trump announced the introduction of 10% import tariffs for European countries that refused to support his plans regarding Greenland. The American leader also threatened to raise these duties to 25% if this burning issue remains unresolved by June.

In response, European officials stated their intention to put the trade agreement with the United States, signed last year, on hold. The current standoff is likely to end in a compromise, as it has occurred several times during Trump’s presidency. However, under these circumstances, European investors appear to have second thoughts regarding American assets, Deutsche Bank analysts believe. The EU holds more than $8 trillion in US stocks and bonds, posing a serious threat to the capitalization of Wall Street giants.

Try out the following strategy for your trading:

Sell SPX below 6,920, with Take profit at 6,810 and Stop loss at 6,950.