Roadmap For The Pullback
What the Signals Are Telling Us Right Now
Last Sunday’s SubStack title was “Chop Ends This Week: Big Move Coming”—and that’s precisely what played out.
The market finally shattered its multi-month trading range, unleashing a sharp sell-off that carried $SPX all the way down to 6,710.
It ultimately closed at 6,740, decisively below the 20-week moving average—a key support level I’ve been monitoring closely for months.
This breakout to the downside confirms the end of the choppy consolidation and opens the door for potentially more sustained downward momentum ahead.
The sell was powered by a combination of geopolitical tensions (the Iran conflict and oil prices) along with a disappointing February jobs report triggered rising stagflation concerns.
S&P 500: Fell 90 points, or 1.33%, to close at 6,740
Nasdaq: Declined 361 points, or 1.59%, to close at 22,387
Russell 2000: Got hit the hardest with a 2.3% decline down to 2,525
Oil prices surged to their highest since 2023, closing above $90/barrel. This capped the market’s worst week since October 2025:
Dow lost about 3%
S&P 500 down 2%
Nasdaq down 1.2%
With the market decisively breaking below the key 3-month support at 6,775, the big question on everyone’s mind is: Where to from here?
Important context: We’ve been anticipating a sweep of the December 2025 low around 6,720 ever since January—and last week’s sharp sell-off finally delivered exactly that, taking $SPX down to an intraday low of 6,711 before closing at 6,740.
Now, the next major sweep we’re watching is of the November 2025 low at 6,521. That could
Bullish scenario: If the market manages to sweep 6,521 but still holds a weekly close above it, this would likely complete the downside capitulation and set the stage for a very aggressive rally. In that case, our upside target becomes $SPX 7,136—and if that level gets cleared, we could see higher levels in play.
Bearish scenario: However, if we get a weekly close below 6,521, it opens the door to deeper downside. The next meaningful support levels would then be around 6,350 and 6,150. If 6,150 breaks the the market will go much lower.
This remains a classic “sweep and reverse” setup versus further breakdown—watch those weekly closes closely around 6,521 in the coming weeks for the decisive signal.
