Selling SPX down to $7,490

One look at the 4‑hour chart of the S&P 500 Index (SPX) and the story is pretty clear: the long-term uptrend is over, and the market has flipped into bearish mode. After peaking near $7,814.9 (an all-time high), prices embarked on a prolonged downward slide. The level to watch right now is the "mirror" zone at $7,490—a threshold that has previously served as both resistance and support.

So, what's driving this shift? On the fundamental side, the sell-off isn't happening in a vacuum. It is being driven by two major factors: a global fuel crisis and inflation that simply refuses to budge.

Let's break them down. Stock markets in the United States and beyond are currently stuck in a stagflation squeeze. Specifically, energy supply chains are in disarray, geopolitical tensions are simmering around key logistics hubs, while oil and gas prices have shot through the roof. For corporate giants in transportation, manufacturing and technology, these sky‑high fuel bills are cutting straight into their margins.

And the pain doesn't stop there. Expensive commodities mean one thing for consumers: elevated prices. With inflation showing no mercy, the Federal Reserve (Fed) has no choice but to keep policy tight and restrictive. This puts a damper on economic activity, drains consumers' wallets, and dents the future earnings that underpin S&P 500 valuations.

Then we should go back to $7,490. This level once acted as a brick wall until it was convincingly broken to the upside. At the moment, it is the scene of a classic retest, with old resistance flipping into new support.

But here is the catch: if inflation expectations keep heating up, this barrier won't hold. A confirmed 4‑hour close below $7,490 would crack the floor wide open and set the stage for a full‑blown market collapse.

The ultimate recommendation is to sell SPX. Lock in profits at $7,490. Place Stop Loss at $7,700.

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 you to enter a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.