SPX S&P 500 Daily and Weekly Charts; US Stock Market Crashes -9% in 8 Weeks Now in a Cyclical Bear Market

The United States stock market, the S&P 500, SPX, crashes -9% in only 8 weeks. That beating is going to leave a mark. The Wall Street analyst targets of 8K plus are farther away each day with only 9 months remaining in the year. The business media calls a -10% pullback a correction and a -20% drop a bear market. These definitions are hokey and not of much use but everyone follows them.

Three metrics that do dictate the cyclical bull market versus the cyclical bear market are the SPX 12-month MA cross, the NYA 40-week MA cross, and the SPX 150-day MA slope. The SPX 12-mth MA is at 6497 with price below at 6369 ushering in a cyclical bear market. The NYA 40-wk MA is 21707 and this failed on Friday afternoon, creating the sick finish into the bell, with price down to 21632 ushering in a cyclical bear market. 

The SPX daily chart above shows the 150-day MA and you can see that the slope flattened and is rolling over to the downside (sloping lower) ushering in a cyclical bear market (red box). If you are long any stock or ticker, you want the 150-day MA sloping higher, otherwise, you will lose your shirt. If you are short, you want the 150-day MA sloping lower (downward) to verify the negativity ahead, otherwise, you will be wearing a barrel.

All three metrics call out a cyclical bear market ahead despite the media's stupid -20% bear market pullback number not even registering as yet. The -10% correction has not occurred yet and that would be a 700-point drop to 6300 that is nearby. Price has to regain the 150-day MA to flatten the moving average line and try to get it sloping higher again but that appears to be a tall order. The bulls are going to fight like Hell tomorrow morning to pull the NYA back above 21707 to stave off the bears. Watch this closely.

Sticking with the daily chart, Keystone described the topping process in real-time since last Fall. The SPX topped out at 7002 on 1/28/26 and crashes -9% to 6369 in only 8 weeks. Remember when Keystone told you the drop would be from 200 to 800 SPX points? We are down 633 points so far. Note the red rising wedges on both charts. Remember when Keystone told you that the drops from rising wedges can be quite dramatic? That blue channel is very dramatic.

Stock trading is all about what have you done for me lately. The prior SPX daily chart shows the SPX starting to set up for a relief rally in the daily time frame but the weekly chart remained weak. The relief move was short-lived due to the negative news about the Iran War. The high price of oil will doom the global economy. Everything got sold off on Thursday and Friday, and thrown out the window including the baby, the bathwater, and the sink itself. Timmy Trader freaked out because clients are calling non-stop asking about how much money they are losing. He could not take the pressure and ran across the trading floor and jumped out the window but fortunately, he was on the ground floor.

Price makes a lower low, gapping lower, so the indicators can be assessed for positive divergence and a potential bottom. The green lines show that the histogram, stochastics and money flow are possie d and ready to send price higher, ditto the oversold RSI and stochastics. However, the RSI is printing a hair lower, into oversold territory, and the MACD line also remain weak and bleak. Thus, a couple day jog move is likely needed to give time for the RSI and MACD to set up with possie d. Do not be surprised if the relief rally starts right away, or anytime in the holiday-shortened week ahead. Markets are closed for Good Friday.

The negativity on the Iran War creates the lingering sour mood for equities after the neggie d sealed the top and started the slapdown 8 weeks ago. The Aroon shows that 100% of the bears expect stocks to fall forever while almost all the bulls also believe the same. This behavior verifies the extreme negativity that typically occurs at a bottom when a relief rally begins. The ADX shows that the downtrend in stocks is a STRONG downtrend for the last 2 weeks. Strong downtrends tend to sustain themselves over time.

Price has violated the lower band so a trip back up to the middle band, also the 20-day MA, at 6676, and dropping fast, is on the table. The black circle shows that the Death Cross should occur at the second or third week of April, say within the next month. The daily chart should set up to begin a bounce this week. Stocks are usually higher through the full moon that is Wednesday. Stocks are typically higher into a holiday that is Friday. When stocks fall during a month, the final couple days or so are usually higher and that would be tomorrow and Tuesday. These are bullish weights trying to counteract the Iran War.

The BPSPX was on the verge of providing a buy signal but that was snuffed out due to the Iran War negativity. The BPSPX is at 36 so watch for a six percentage-point reversal to 42 to confirm a buy signal for stocks. A lot of metrics are lining up for a relief rally but it all depends on King Donnie.

The SPX weekly chart shows the tight band squeezes at the start of last year and the repeat this year. Both squeezes result in down moves. Tight bands forecast a big move but do not predict direction.

Note that the indicators remain weak and bleak on the weekly time frame except for the money flow and ADX and the stochastics are oversold agreeable to a bounce. These positives will join the daily chart and help create a relief rally, but the negative indicators forecast lower prices ahead on the weekly basis. Trading is like playing multi-dimensional chess except time is the dimension not space. The SPX 2-hour and daily charts are setting up to bounce but the weekly and monthly charts remain weak forecasting lingering long-term sogginess in equities.

The Aroon shows that all the bears believe stocks will go down forever, like the ADX for the daily chart, but the bulls still remain somewhat upbeat that stocks will recover, like stocks always did over the last couple decades (due to Fed intervention). This is bad news for bulls. They are going to keep believing in the stock market as the weekly and monthly time frames transport them on the Highway to Hell.

A relief bounce should be at hand this week anytime unless the Iran War explodes into WW III. All is not calm on the Western Front that is now the Houthis shooting missiles and rockets at US military bases. The weekly chart lost the 50-wk MA at 6478 so a back kiss of this important level would be in order. The 12-mth MA is 6497 so this area at 6470-6500 would be a potential upside target for a relief rally in the daily time frame going forward. This would also be a move higher to the top of the downward-sloping blue channel. Keybot the Quant remains short. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.