(Part 3 of 5) - Market Outlook of S&P500 (05Jan2026)
Market Outlook of S&P500 (05Jan2026)
Technical Analysis Overview
MACD Indicator
Following the recent top crossover, the Moving Average Convergence Divergence (MACD) indicator continues to suggest a downtrend.
Moving Averages
The price action, as depicted by the candlesticks, is currently situated above both the 50-day and 200-day moving average (MA) lines. This positioning indicates a bullish trend in both the short-term and long-term outlooks. Furthermore, both the 50 MA and the 200 MA are trending upward, reinforcing the positive trend.
Exponential Moving Averages (EMAs)
The three Exponential Moving Averages (EMA) lines are showing a bullish outlook. There is a potential convergence that implies a trend change.
Chaikin Money Flow (CMF)
The Chaikin Money Flow (CMF) currently registers at 0.03 and is also trending upward. This reading indicates that there is more buying pressure than selling, which is typically interpreted as a positive signal for future price movement.
More Technical Analysis
Currently, a total of 11 indicators point towards a “Buy” rating, while 8 suggest a “Sell” rating. This brings the consensus to “Neutral” based on the technical analysis.
CNN Fear & Greed Index
From the latest CNN Fear & Greed Index, the market lingered in the “Neutral” range. Will the trend head towards the “Fear” region? Only time will tell.
Candlestick Analysis (from Grok)
Short-Term Outlook (1-3 Months)
Mildly bullish with consolidation likely. Recent high-reliability daily/weekly bullish patterns (Three Outside Up on Dec 11, 2025; Three White Soldiers on Nov 11, 2025) support buyer control, but smaller-bodied candles near all-time highs signal slowing momentum and indecision. Expect sideways trading or a shallow pullback toward 6,500–6,600 support before resuming upward. Risk of deeper correction only if clear bearish reversal forms.
Long-Term Outlook (6-12+ Months)
Strongly bullish. The monthly Morning Doji Star and Morning Star reversals (completed May 2025) accurately marked the major bull market bottom, driving ~35% gains since. Structure remains intact with higher highs/lows and a breakout above prior resistance. Primary trend favours continuation toward 7,000+ levels in 2026, treating dips as buying opportunities absent major macro shocks.
(Candlestick patterns are probabilistic; combine with volume, fundamentals, and broader market context for decisions.)
S&P500 Market Outlook
Given the above indicators, I lean towards a bearish outlook for the coming week.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
