Selling SPX with $6,510 in sight is key strategy

A glance at the daily chart shows the S&P 500 Index (SPX) firmly entrenched in a downtrend. During today’s early trading, the price didn’t go far from the opening level, hovering around $6,620. This was also close to the psychologically significant $6,000 threshold.

The technical setup is clearly bearish. The index is pressing against the lower Bollinger Band ($6,598), while the middle one ($6,790) stands guard, deflecting potential rebounds. When the downtrend is strong, such prolonged contact with the bottom edge of an expanding channel confirms that sellers control the market and there is still room for further declines.

Let’s take a look at momentum indicators. The Chaikin Oscillator remains in the red, suggesting that distribution flows outweigh accumulation ones—another sign that major players keep reducing their positions. The pace of the oscillator’s decline has slowed, but a true trend reversal would require a decisive push above the zero line. So far, this remains a distant prospect.

The volume indicator tells the same story. A drop in trading activity amid falling prices could suggest that momentum is waning, but a strong trend is more likely an indication of diminished buyer interest than of sellers running out of steam. A true reversal signal would be a surge in volumes during an uptrend, which the market has not yet shown.

The fundamental landscape intensifies the index’s technical weakness. Yesterday, the Federal Reserve (Fed) held interest rates unchanged and forecasted only one potential cut this year, tying the central bank's hands just when stimulus might be needed—especially with the Consumer Price Index (CPI) still hovering above 2%. The heated atmosphere in the Middle East has recently sent crude prices above $110 per barrel, increasing inflation expectations and derailing the Fed’s easing cycle. These factors create a hostile environment for risky assets in the near term.

Take into account the trading strategy presented below:

With the bearish trend firmly intact and no signs of an imminent reversal, consider selling SPX. The key scenario implies a further decline to $6,598 and beyond. Place Take profit at $6,510 and Stop loss at $6,720.

The forecast is valid from March 19 till March 26, 2026.