Mapping the Market: S&P 500 at risk of further losses

The S&P 500 can’t seem to hold the high ground. Since hitting a record peak ​in October, each retreat has hit a lower bottom and every bounce has ​topped out beneath the last. Now, the benchmark US stock ‌index ​is on the precipice of a potentially deeper slide, technical analysis indicates.

Click here for a detailed technical analysis chart. Technical analysts use charts of past price action to figure out where a market could go next. When a stock or index is falling like ‌the S&P 500, chart watchers look for something called support, which is a level that will act as a floor for the price. In a rising market they look for resistance, which is the opposite of support and works like a ceiling.

Support and resistance may come in a variety of ways. Moving averages, which strip out price extremes over a ‌set period, are a common source. Because they are constantly updating, they rise and fall. Support and resistance can be derived from previous lows and highs, as well as something ‌called Fibonacci retracements, which are percentage-based calculations of levels a market often revisits after a move. Trendlines — diagonal lines connecting key highs or lows — can work as well. Also, big round numbers can be support or resistance and are often known as psychological levels.

The S&P 500’s slide last week pulled it down near the 200-day moving average, a closely watched level in many markets. It takes on added significance for the S&P 500 ⁠because the ​index hasn’t closed below it since April 8. It ⁠is also rising since it still incorporates the S&P 500’s gains from this year’s earlier lows. A fall below the 200-day moving average, currently at 7,331, would put a spotlight on a zone of support located ⁠roughly between 7,237 and 7,313. This area is jam-packed with the June and July lows, a trendline from April 2025 and the 38.2% Fibonacci retracement of the March-to-October 2026 rally.

If 7,237 gives way, downside ​pressure may intensify with the next significant support in the 7,080 to 6,900 area, which includes the 50% and 61.8% retracements of the March-to-October 2026 advance, as ⁠well as the January high at 7,002.29 and the 7,000 psychological level. However, even after last week’s wipeout in technology shares, the S&P 500’s selloff since early October has not been terribly aggressive, with the index only down ⁠around ​4% from its peaks, according to data supplied by LSEG.

If it can rebound above Monday's high near 7,578, the next hurdles would be the 100-day and 50-day moving averages, near 7,620 and 7,673. A push above the November 4 high at 7,715.57 would break the pattern of lower highs from the October peak and refocus the benchmark index ⁠on its 7,844.62 record intraday high. What the chart shows:

(Mapping the Market is a daily column written by Reuters journalists. The commentary is based on a technical analysis of financial charts, which helps assess the likelihood of future price moves but does not guarantee the outcome. The ‌column does not constitute investment advice ‌or trading recommendations.) (Terence Gabriel is a Reuters market analyst. The views expressed are his ​own. Editing by Burton Frierson and Aurora Ellis)