Market Turbulence Ahead: Key Events and S&P 500 Bearish Signals

The global financial landscape is poised for volatility as key economic events unfold in the coming days. On Thursday, central bank decisions from Japan (BOJ Policy Rate), the UK (Official Bank Rate), and the U.S. (Unemployment Claims) will set the tone for market sentiment. Friday brings further market-moving data, including UK and Canadian Retail Sales and the U.S. Core PCE Price Index—an important inflation gauge.
The S&P 500’s recent plunge following the Federal Reserve’s rate cut has amplified market uncertainty. The index dropped over 3% after the Fed signaled a pause on further rate reductions, triggering a technical chart reversal and bearish momentum. As investors digest economic indicators and chart patterns, the focus remains on navigating key resistance and support levels amid heightened market pressures.

Thursday Tentative (GMT+2) – Japan: BOJ Policy Rate (JPY)
Thursday 14:00 (GMT+2) – UK: Official Bank Rate (GBP)
Thursday 15:30 (GMT+2) – USA: Unemployment Claims (USD)
Friday 09:00 am (GMT+2) – UK: Retail Sales m/m (GBP)
Friday 15:30 (GMT+2) – Canada: Retail Sales m/m (CAD)
Friday 15:30 (GMT+2) – USA: Core PCE Price Index m/m (USD)

Since reaching an all-time high of 6101.24 on December 6, the S&P 500 Index has moved sideways until the Fed’s rate cut. By the end of yesterday’s session, the S&P 500 had plunged more than 3%, triggering a stock market selloff. This price action formed a chart reversal pattern known in technical analysis as a failure swing. The peak at 6097.90 did not surpass the previous peak, leading to a drop below the key support level of 6032.09, which opens the door for a significant decline.
As prices fell below the 50-period Exponential Moving Average (EMA), this validated the downturn. However, the 20-period EMA has yet to cross below the 50-period EMA. Both the Momentum Oscillator and the Relative Strength Index (RSI) indicate a bearish outlook. The Momentum Oscillator has dropped below the 100 baseline, and the RSI is below the important 50 level, suggesting continued bearish pressure.

If buyers take control of the market, traders may shift their focus to the following four potential resistance levels:
5926.59: The first price target is estimated at 5926.59, mirroring the monthly Pivot Point, PP, calculated using the standard methodology.
6032.09: The second level of resistance is set at 6032.09, which aligns with the swing low from December 10.
6101.24: The third price target is seen at 6101.24, mirroring the all-time high, which was reached on December 6.
6154.72: An additional price objective is estimated at 6154.72, representing the weekly resistance, R3, calculated using the standard Pivot Points methodology.

If sellers maintain control of the market, traders may focus on the following four key support levels:
5833.60: The initial support level is seen at 5833.60, representing the trough from November 19.
5776.55: The second support level is determined at 5776.55, reflecting the peak marked on September 26.
5695.94: The third downside target is established at 5695.94, corresponding to the swing low from November 4.
5385.01: An additional downside target is noted at 5385.01, reflecting a daily low from November 6.

Wall Street saw a dramatic selloff after the Federal Reserve cut interest rates by 0.25%, its third consecutive reduction, and signaled a pause on further cuts while inflation remains above 2%. The S&P 500 fell 3%, its worst Fed Day since March 2020, and small-cap stocks saw an even steeper decline, with the Russell 2000 dropping 4.4%. Treasury yields surged, and volatility spiked, with the VIX hitting its highest level since August.
Market professionals attributed the selloff to fears of fewer rate cuts in 2025 and profit-taking after a strong year. Analysts noted that rising yields and a hawkish Fed stance were a “negative cocktail” for risk assets, leading investors to lock in gains and reassess valuations.

In conclusion, the coming days are set to bring significant market activity as critical economic events and data releases shape global sentiment. Investors face a challenging environment, with heightened uncertainty following the Fed’s rate cut and cautious stance on future reductions. Technical indicators signal bearish momentum in the S&P 500, while resistance and support levels offer potential trading opportunities amid this volatility. As central bank decisions and key economic data unfold, market participants must remain vigilant and adapt strategies to navigate the shifting financial landscape.