<Part 3 of 5> Market Outlook of S&P500 (20 Oct 2025)

Market Outlook of S&P500 (20Oct25)

Technical observations:

• MACD analysis indicates a bearish trend.

• The Exponential Moving Averages (EMA) are aligned in an uptrend, which supports a bullish outlook. The 3 EMA lines are converging, which implies a reversal from the current uptrend.

• Both the 50-period and 200-period Moving Averages (MA) are showing an uptrend, suggesting a bullish market sentiment in both the short and long term.

• The Chaikin Money Flow (CMF) is positive at 0.15, indicating an influx of buying volume over the last 20 periods.

Technical indicators currently show 12 “Buy” and 7 “Sell” signals, resulting in an overall “Neutral” recommendation on the daily interval.

Candlestick Trend Analysis (using Grok & Gemini)

Overall Interpretation

• Short-Term Trend: Bullish with caution. The Dragonfly Doji and Upside Gap Three Methods signal continued bullish momentum, but the recent +0.53% close on modest volume hints at a potential consolidation or minor pullback. The rally from 5,300 to 6,664.01 (25% gain) is strong, but overbought conditions (e.g., RSI ~70) could prompt profit-taking.

• Long-Term Trend: Bullish. The Morning Doji Star and Morning Star from May remain key bullish anchors, with the price 25% above the 2025 low (5,345.01). The Evening Star (June 22) was a temporary top, overcome by the recovery, pointing to a target of 7,000+ by year-end (aligned with analyst forecasts).

• Market Sentiment: Bullish, driven by AI/tech gains and Fed rate cut expectations, but the PE ratio (~31) signals overvaluation risks. October’s historical strength (average +1.5% over 5 years) supports upside.

Outlook for the Coming Week (October 20–24, 2025)

• Expected Movement: Bullish continuation, targeting 6,750–6,800 if volume increases. Support at 6,500 (recent base); resistance at 6,800 (psychological). A pullback to 6,500 is possible if profit-taking occurs early in the week.

• Risks: A Bearish Engulfing could form if selling resumes, retesting 6,500 or 6,300. Monitor earnings season (e.g., tech reports) and inflation data for volatility.

• Recommendation: Favour longs above 6,500; trail stops at 6,450. The patterns support upside, but watch for confirmation via volume on any pullback.

The patterns confirm a robust bullish trend, with the S&P 500 poised for further gains amid positive sentiment, though short-term consolidation is possible.

Combining the above, I lean towards a bearish outlook, though news and other macro matters can add to the volatility.

@TigerStars

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