S&P 500 tests All Time Highs, RSI Divergence Provides Caution
New Highs or Reverse of Course?
Wall street’s bounce back from its decline in April amid President Donald Trump on-again-off-again tariff salsa has been remarkable to say the least. As of mid 2025, S&P 500 has come within striking distance of all-time highs, while treasury two year yields remain at their lowest level since early May. Leading this rally is tech/AI platforms that continue to pace gains, up 45 percent year-to- June 2025, with airlines and industrials joining the party.
“The bulls are out of their bucking shoots,” said Greg Bassuk of AXS Investments after a 1.1 percent surge that followed news of a fragile Israel-Iran cease-fire and dovish comments from the Federal Reserve. Such statements included Chair Jerome Powell stating that policymakers “are well positioned to wait to learn more about the likely course of the economy before considering any adjustments.” All said, Wall street’s median target for 2025 now sits at 6400, indicating a 5 percent upside from current levels.
Notable institutions and S&P 500 targets are:
- Goldman Sachs, 6500
- Morgan Stanley, 6500, noting resilient cycle, Fed cuts
- Deutsch Bank, 6550, mentioning smaller tariff drag, solid GDP
- UBS GWN, 6400
- Barclays, 6050, citing normalized earnings growth once trade fog lifts.
S&P 500 Weekly Chart
S&P 500 test all time highs
Source: Sigmanomics.com
The S&P 500 is 3 percent above the 50 day simple moving average and 11 percent above its 200 day, which is a clearly a textbook up-trend.
Looking at the weekly chart of the S&P 500, the market is testing all time highs; however, failure to overcome this area could lead to a double top from a technical analysis perspective. At the same time, there is clear weekly bearish divergence that bulls should not overlook.
Key levels to watch going forward is immediate ceiling in the 6147-6160 cover and support at 5900 and 5750 respectively which represent the 50-DMA and neckline of April’s death-cross.
Takeaways and Forecast
Scenario
12 month target
Sigma Probability
Bull
6480-6600
30 percent
Base
5700-5900
43 percent
Bear
4370 – 4600
23 percent
Market participants should trend with caution as the market could enter bear territory if cumulative tariff effects sink EPS to $211. Also, if the Fed delays easing even further, leading to inflation spike, the curve could bear-flaten again and place a hold on credit.
Follow the trend! For now, upside risks remain until they do not: data surprises remain positive and liquidity is abundant. Technical analysis point to further gains, while bearish cases are merely hypothetical cases.
