With no clear new catalysts emerging, markets appear hesitant to fully commit to a seasonal year-end rally. The S&P 500 Index (^SPX) has remained locked in a tight consolidation range since late November, failing to push to fresh highs. On the upside, 6,900 remains the level to beat, advises Fawad Razaqzada, technical analyst at TradingCandles.
Downside momentum has also been limited, however, reinforcing the view of a range-bound market waiting for direction. The key question remains: what will provide the next catalyst, and will it be bullish or bearish?
As the year draws to a close, a clearer theme has emerged: mega-cap technology stocks that have driven this bull market may be losing their ability to lead on their own. Investor confidence in the sector is being tested, especially around stretched valuations and whether heavy investment in Artificial Intelligence (AI) can still be justified.
From a technical standpoint, the broader bullish trend remains intact. As long as the shaded blue support zone between roughly 6,790 and 6,812 holds, as it has done over the past few sessions, the bulls should remain relatively comfortable. This area represents former resistance and aligns with the 21-day exponential moving average.
A decisive break below this region would, however, bring the bears back into play. In that scenario, 6,731 becomes the next downside target, followed by the psychologically important 6,700 level. A deeper pullback could expose 6,600 as a more medium-term bearish objective.
For now, the trend is still your friend – but bond yields and tech direction may soon decide how long that remains the case.
