This is a tactical trade against the prevailing trend, not a call for the end of the bull market. A healthy correction often creates the foundation for the next advance, and that is currently the higher-probability path unless market structure materially deteriorates.

SPX : Selling Into Supply While Respecting the Bigger Bull Market

The SPX has rallied aggressively over the past several sessions, reclaiming new all-time highs then forming a original, fresh 4-hour supply zone. I am short from the 7,735 proximal level, where higher-timeframe supply aligns with the upper boundary of the long-term ascending channel and a cluster of buy-side liquidity. While the broader trend remains firmly bullish, this area offers an attractive location for a tactical countertrend trade as the market appears due for a healthy reset.

Technically, price has completed a near-vertical advance from the lower half of the rising channel into a region where previous buyers are showing signs of taking profits. Markets rarely move in a straight line, and strong trends often experience short-term mean reversion before continuing higher. My initial objective is a move back into the 7,575-7,600 demand region, with the possibility of testing 7,500 should momentum accelerate. A sustained daily close below 7,550 would increase the probability of a deeper correction, but until then, this remains a pullback within an intact primary uptrend.

The fundamentals support this view. Corporate earnings continue to provide a strong foundation for equities, with one of the strongest quarterly earnings growth periods in recent years and analysts continuing to raise forward earnings expectations. Those improvements justify higher long-term valuations and keep the structural trend pointing toward the psychological 8,000 objective.

However, several short-term headwinds favor a temporary decline. The recent rally has left the market technically stretched, encouraging profit-taking after a rapid advance. U.S. Treasury yields remain elevated near 4.6%, keeping financial conditions relatively restrictive and limiting how quickly valuation multiples can expand. At the same time, heavy AI-related capital expenditure continues to outpace revenue growth for many companies. Investors have largely rewarded this spending so far, but concerns over free cash flow compression could trigger periods of valuation adjustment. Ongoing geopolitical uncertainty and energy price volatility also continue to inject inflation risks that reduce expectations for aggressive Federal Reserve easing.

For those reasons, I view this as a short-term tactical sell rather than a bearish call on the overall market. My preferred scenario is for price to sweep liquidity above the recent highs, reject from the 4-hour supply, and retrace into lower demand before buyers attempt another leg higher. If that retracement develops as expected, it could provide fresh opportunities for longer-term bulls targeting the 8,000 all-time high.

In my view, the trend remains bullish until proven otherwise. The short simply aims to capture the market's natural need to rebalance after an extended move into major resistance, where risk-to-reward temporarily favors sellers over buyers.

Key Levels

Short Entry: 7,735 (4H supply proximal line)
Resistance / Liquidity: Upper boundary of the ascending channel
Primary Pullback Target: 7,575-7,600
Secondary Target: 7,500
Bullish Invalidation: Sustained acceptance above the 4H supply and channel resistance
Long-Term Bullish Objective: 8,000

put together by : Pako Phutietsile as @currencynerd