The Head and Shoulders pattern has now fully played out, with the projected buy zone around 5930 briefly tested during Friday’s sharp sell-off. The decline was triggered by escalating geopolitical tensions following Israeli strikes on Iran. Shortly after reaching the expected target, the S&P500 rebounded above the 6000 mark post-opening, demonstrating the underlying strength of U.S. indices.
However, this rebound cannot conceal the growing bearish momentum: the S&P500 Indicator turned red, and the sharp shift in value from +15 to -15 marks a clear bearish impulse. This is further corroborated by the VIX climbing back above 20 and crude oil prices surging sharply.
Whipsaw conditions expected: As long as the daily 200-day moving average remains intact, bulls are likely to continue “buying the dip.” This creates a highly unstable environment prone to sharp intraday reversals. Should the 5930 support level be breached, a further decline towards the 5800–5775 range appears likely—where the 200-day and 100-day moving averages are expected to offer technical support.
Despite the S&P500 Strategy issuing a LONG signal for Monday, the current setup suggests that it may be prudent to sideline this signal, given the increased volatility and bearish backdrop.