Selling S&P 500 Index with 7,250 target amid rising bearish pressure

What are we seeing in the S&P 500 Index (SPX) market? A steep decline and elevated volatility. Yesterday’s Federal Reserve (Fed) rate decision triggered panic selling, as confirmed by several technical indicators.

The daily chart shows that prices have just broken out of Bollinger Bands. After hitting a local peak of 7,609.8 on July 13–15, the index has been gradually sliding. SPX breached the 20-day simple moving average (SMA20) and closed yesterday’s session beneath the bottom line of the channel (7,360.3). Right now, the index is trading even lower, around 7,330. Recent bearish candles have been accompanied by notably higher trading volume compared to previous weeks—a telltale sign of panic-driven selling rather than normal distribution.

The Relative Strength Index (RSI) offers further evidence of the bears’ grip. It has just plunged from near-overbought levels to 32. The scale of this decline underscores the intensity of the current selling pressure. What’s more, this fall is likely to continue, as the indicator has yet to reach the floor at 20. The Chaikin Oscillator completes the picture: it has been in deeply negative territory for nearly two weeks and continues to slide. This suggests a shift from accumulation to active distribution, as major players keep liquidating their positions with no signs of slowing down.

Today's price action shows prerequisites of a rebound following yesterday’s sharp decline, but the low trading volume hints that buyers lack the strength to reverse the trend.

Fundamental factors also weigh on SPX. The Fed’s decision to hold rates in the same range, despite an internal split and three votes for an imminent hike, combined with rising Treasury yields and growing doubts about returns on AI investments (Micron, AMD, KLA)—all burden the index. This is especially significant given that the tech sector now accounts for the largest and most influential share of the market.

Try out the following trading strategy:

Sell SPX at 7,330, with Take profit at 7,250 and Stop loss at 7,380.

The forecast is valid from July 30 till August 6, 2026.