SPX may run into profit-taking near record highs with earnings on deck

During today's early session, the S&P 500 Index (SPX) surged to new all-time highs. What's driving the locomotive? A rare mix of AI spending optimism and faint hopes that the Middle East might actually find a diplomatic off-ramp.

Renewed enthusiasm for technology is currently leading the charge. Chipmakers, particularly Intel, have delivered eye‑catching revenue forecasts, reinforcing the belief that the artificial intelligence boom is here to stay. Add to that the looming earnings releases from Big Tech, and you've got a recipe for continued upside—at least for now. 

But don't be fooled: the coming week is packed with pitfalls. The "Magnificent Seven" heavy hitters are set to report on Wednesday and Thursday. With the market pricing in roughly 19% profit growth and stock multiples stretched to levels that leave no room for error, even a small crack in cloud revenue or a suggestion of diminishing returns from AI projects could unleash a wave of selling.

Given this backdrop, it won't be surprising to see institutional money start heading for the exits soon. Private investors have already boosted their share from 7% to 10%—a well-worn signal that you're chasing a move, not catching its start.

Technically, the uptrend is still intact. New highs were within reach on April 27, powered by a classic bullish trigger: the 20-period Exponential Moving Average (EMA) crossing above the 50-period one on April 15. After a strong push, the index only returned to the uptrend line (drawn through the March 31 and April 23 lows) at the end of last week. This line continues to act as dynamic support. Nevertheless, one warning light is flickering: the Chaikin Oscillator is fading even as the price peaks. Such a divergence often appears late in a powerful impulse move.

Here's the trading plan for those looking to make a move:

Sell SPX at the current price ($7,160), which is near its all-time high. Profits are taken at $6,950. Stop loss is set at $7,275.

This forecast is valid from April 27 till May 4, 2026.