S&P 500 Faces Critical Trend Line Resistance

The S&P 500 is flirting with danger. While it continues to hit new all-time highs almost daily, a critical trend line looms large, threatening to end the rally.

This trend line, originating in October 2023, acted as reliable support for nearly a year, with the S&P bouncing off it four times. However, since a decisive break in July 2024, it has become a formidable resistance level. The index has already tested this ceiling four times since July, each attempt met with a pullback.

With the S&P 500 now a mere 50 points away from the trend line at 6,150, a retest seems imminent. History suggests this could trigger another decline. Adding to the concern is the extremely low VIX (fear index), currently below 13. This complacency in the market is a classic warning sign.

Investors should proceed with caution. While the S&P 500 appears unstoppable for now, a significant sell-off may be just around the corner.