After several sessions of strong gains, the market is starting to lose its grip, with the S&P 500 Index hitting the upper limit of its range and slipping into a corrective phase.
Let's rewind to see how we got here. The rally turned out to be textbook: SPX pierced through the Bollinger Band midline, touched the top line on July 10, and came within 0.5% of its all-time high. Backing this climb was serious firepower: the Chaikin Indicator flipped from negative to firmly positive territory, while the Moving Average Oscillator crossed above zero—a telltale sign that the short-term trend had decisively shifted in favor of bulls.
Fast forward to today, July 13, and the music has changed. Bollinger Bands are flashing a classic rejection pattern from the upper band: a red candle with a long body and a tiny wick. This is a classic overbought warning. To be fair, the price is still above the midline, so it is too early to call it a trend reversal. However, caution alerts are piling up.
The Chaikin Oscillator is ringing a quieter alarm. Though it remains deep in positive territory, it began rolling over today. When you combine this with the bounce off the upper Bollinger Band, it paints a coherent picture: the market is seeing a wave of profit-taking after the recent surge.
From a fundamental perspective, the picture is torn. US‑Iran talks have calmed some nerves, but geopolitical uncertainty hasn't gone away—it is still a drag on sentiment. On the flip side, earnings season is gearing up for a monster quarter, with S&P 500 profits expected to jump 24% year‑over‑year and the forward P/E holding firm near 20. Yet, inflation data and Federal Reserve speeches are lurking around the corner, ready to stir things up. Such a volatile cocktail raises the odds of a correction and further profit-taking.
For those ready to act, here is the trading plan:
Sell SPX in the $7,530–$7,580 range. Place Take profit at $7,400. Set Stop loss at $7,650.
This forecast holds true from July 13 till July 20, 2026.
This content is for informational purposes only and is not intended to be investing advice.
