Dear Traders,

Before diving into the latest S&P 500 analysis, let me pick up where I left off last time.

Last time, I shared my analysis on GBPUSD, anticipating a more bullish move—and that’s exactly what played out.

Take a look below to see when I published that article and where the price is now.

It basically shot up 200 points

The big question now: Is there still room for more upside?

Absolutely.

The next major supply zone sits another 300 points higher, leaving plenty of space for further gains.

And now, what am I looking for today?

S&P500 Trading Analysis 03.04.2025

Not long ago, I warned about the potential for the S&P 500 to resume its decline and kick off a new bear market.

Here is the video I covered that in:

And right now, that scenario is unfolding before our eyes—yet hardly anyone is talking about it.

But that’s not unusual.

Bear markets often go unnoticed until it’s too late—not just by the general public but also by the so-called experts.

The media, for one reason or another, tends to downplay these developments.

They focus on the daily noise, while ignoring the bigger picture.

Coincidence?

I doubt it.

That said, I’m not here to dive into conspiracy theories.

But, what am I looking at today?

S&P500’s Downfall

I’m not trying to sound like a prophet—far from it.

In fact, I believe in the Efficient Market Hypothesis and fully acknowledge that no one can accurately predict where the markets will be in 2026.

However, there are simply too many red flags right now.

While I remain open-minded, the current landscape leans more bearish than bullish in my view.

But why is that?

The Technicals- Is S&P 500 in Oversold Territory?

Potentially.

I would strongly encourage you to watch the video above since I do not want to be repetitive.

So, here I will concentrate on the technicals.

So, no indicators.

No fundamental analysis.

…or moving averages…

Simply what I am looking for.

Here is the 4-hour chart:

There are two potential scenarios for a bearish play.

Scenario 1: If bearish momentum picks up aggressively, I anticipate a sharp and swift sell-off (see blue arrows).

Scenario 2: If the bears take longer to build momentum, I wouldn’t be surprised to see a period of consolidation before the next wave of selling. (see green arrows)

What will I be looking for at those inflection points?

Here is what:

Instead of a red circle, I will be expecting a candlestick confirmation.

These could be:

Inverted pin bar

bearish engulfing pattern

inside bar

More markets than just the S&P 500

Across the spectrum of all US indices and also EU shares, I am looking at a very similar pattern.

Here is the Dow Jones daily chart:

Even though I do not expect this move to happen in a straight line, the next major demand zones is miles away.

Pro Tip: People react more quickly to losses than gains (loss aversion). When the market starts dropping, panic spreads fast. Fear is stronger than greed

So, I expect the sell-off to be much quicker than the bull market.

Some of the other reasons are;

A) In a downturn, buyers become scarce. This “air pocket” effect can lead to sharp price drops.

B) Margin calls, stop losses, and redemptions from funds can create a chain reaction of sell orders.

C) News travel fast- bad news (like earnings misses, economic data, or geopolitical events) spreads rapidly and triggers knee-jerk reactions.

Here is just another chart showing why my pessimism is growing:

Here’s the daily NASDAQ chart.

As you can see, the index has dropped over 15% from its recent peak.

In theory, a bear market is defined by a decline of 20% or more, which means we’re now just 5% away from officially entering bear territory.

What shall I do?

Please do not consider this as financial advice.

I am not a financial advisor- I am an independent trader.

It is just my opinion, and the only way to prove an opinion right or wrong is to put it to the test of time.

As mentioned above, I’ll be watching for a candlestick confirmation from a long-term perspective.

That said, in the short term, there may be opportunities to enter at a more favorable price point.

As usual, I am quite active in the day trading room.

So, this is where my next big trade will most likely start.

Until then,

Happy trading,

Atanas

P.S.

Don’t forget, you are one trade away