S&P500 market outlook (26May25)

Market Outlook of S&P500 - 26May25

Technical observations:

MACD - a top crossover should be completed soon, and this suggests a potential downtrend is coming.
Exponential Moving Averages (EMA) lines are showing an uptrend. However, the 3 lines are converging, and a trend reversal is coming.
Both the 50 MA line and the 200 MA line are showing an uptrend.
Chaikin Money Flow (CMF) shows more buying than selling momentum.

The daily interval is showing a “Strong Buy" for the S&P 500 index.

From 20 technical indicators, there are 14 indicators showing a “Buy” rating and 6 indicators showing a “Sell” rating.

Short-Term Outlook: Bullish

The Morning Doji Star and Morning Star (both emerging as of May 23) are strong bullish reversal patterns, suggesting that the current pullback may be nearing its end. These patterns indicate a potential resumption of the uptrend.
The Bullish Doji Star (daily, May 22) further supports a short-term bounce, aligning with the idea that the recent decline is a correction within a broader bullish trend.
The prior technical analysis (May 23) showed the price above the 200-period MA with a positive MACD and CMF, reinforcing the bullish short-term outlook despite the pullback.

Long-Term Outlook: Bullish

The S&P 500’s recovery, combined with its ability to hold above the 200-period MA, suggests the longer-term trend has shifted to bullish, as noted in prior analyses.
The bearish patterns from early 2025 (e.g., Three Black Crows, Three Outside Down) accurately predicted the correction, but their influence has faded as bullish patterns (e.g., Bullish Doji Star, Three Outside Up) have dominated since April 2025.
The emerging Morning Doji Star and Morning Star patterns further support the continuation of the longer-term uptrend, provided the price holds above key support levels.

Given the above, an uptrend is expected and a reversal is on the cards too.

@TigerStars

$S&P 500(.SPX)$

$SPDR S&P 500 ETF Trust(SPY)$

$Cboe Volatility Index(VIX)$

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After a series of declines, the market has become increasingly cautious about any rebound. Most people believe this is merely a dead cat bounce in a bear market, with further drops likely to come. However, some argue that with Trump softening his stance on tariffs, the impact of tariffs on the market may lessen going forward. If a recession can be avoided, the market's downside potential might be limited. Investors are divided on where we are in the current cycle. What’s your take? Is this a dead cat bounce or have we already hit the bottom?

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S&P500 market outlook (26May25)

Market Outlook of S&P500 - 26May25

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