Major Indices Break Down as Bearish Momentum Builds

What to Know

• Major indices break below key moving averages.
• S&P 500 violates bullish trend structure.
• Nasdaq-100 leads with continued downside momentum.
• Failed rallies confirm resistance at 200-day average.
• Fibonacci levels point to deeper correction targets.

Bearish Trends Strengthen Across Major Indices

Equities remain under pressure as evidenced by continuing bearish evidence across the three major indices – the S&P 500 (SPX), Nasdaq 100 (NDX), and Dow Jones 30 (DJ30). This reflects traders becoming increasingly mistrustful of news reports that attempt to put a positive spin on developments related to the war with Iran. Bear trends are now firmly in force across all major indices, with lower prices increasingly targeted. 

S&P 500 Breaks Key Support Levels

The S&P 500 Index (SPX) provides the largest sample size and therefore offers a perspective on the wider market. It broke below the 100-day moving average three weeks ago, leading to a decline below the 200-day moving average and an initial corrective low of $6,474 reached last week. The last time the SPX fell below the 200-day moving average was in March 2025, which was followed by a greater than 15% decline in short order. 

Another bearish signal triggered on a drop below the higher swing low of $6,522 from November on Friday thereby violating the bullish trend structure of a series of higher swing lows and higher highs. 

This week, a bounce occurred into resistance near the 200-day moving average before sellers regained back control. That is bearish behavior suggesting that a continuation of the downtrend looks likely on a drop below last week’s low of $6,474. The SPX remains at risk of a deeper correction as long as it remains below the 200-day average. 

If sellers remain in control, an eventual decline back towards prior resistance near the January 25 high is possible, aligning with a 38.2% Fibonacci retracement at $6,174. 

Nasdaq-100 Leads to the Downside

The Nasdaq-100 (NDX) is in a similar bearish position relative to its 200-day moving average, now near $24,405. Since the more sensitive, tech-heavy NDX can be expected to lead, both indices broke below the 200-dauy average in close succession.

In early February, the NDX provided an early warning by breaking below the 100-day moving average and staying it. That preceded the subsequent breach of the 200-day average last week. Resistance near the former dynamic support indicator was confirmed this week before the bear trend proceeded to a new retracement low of $23,575, at the time of writing. 

An initial lower target zone for the NDX, if the correction continues, lies from around $22,441 to $22,133, representing the 38.2% Fibonacci retracement of the upswing from April 2025. 

Dow Confirms Broad Market Weakness

It is therefore little surprise then that the narrower-focussed Dow Jones 30 (US30) also fell below support of the 200-day moving average and the tested it as resistance this week. All three major equity indices are now showing a weakening trend. showing a weakening trend

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