[SINGAPORE] As the S&P 500 (SPX) enters the first full month of 2026, price action reflects a consolidation period following a strong advance through late-2025. After pushing towards prior all-time highs near 6,980 to 7,000, the index has tested this range as both a near-term cap and psychological barrier. These levels now represent the first meaningful resistance band for January, with sellers emerging as the S&P attempts to clear the 7,000 level.
Beyond this immediate resistance, the next upward target lies near 7,088 to 7,100, corresponding to the 123.6 per cent Fibonacci extension level. A break and sustained move above the 7,088 to 7,100 level would signal renewed upside conviction and potentially attract momentum flows earlier in the year.
On the downside, support is clustered below the current price. The first support zone resides between 6.805 and 6.836, between the 50-day simple moving average (SMA) and closely aligned with the 61.8 per cent Fibonacci retracement level of the recent price swing. This area has acted as a short-term anchor for pullbacks and could be deemed a meaningful level to monitor for bulls on any intraday or multi-session declines.
If selling pressure intensifies below this zone, the next line of support sits around 6,750, marked by the 50 per cent Fibonacci retracement and the 100-day SMA. The 100-day MA has been a reliable guide for the broader trend since mid-2025, and its proximity around 6,750 provides a deeper base that may capture longer-term buying interest in the event of a deeper correction.
From a broader trend perspective, the daily chart shows that the S&P 500 has maintained strong bullish momentum since May 2025, consistently trading above its 100-day SMA throughout the advance. While the 50-day SMA experienced breaches on multiple occasions in the fourth quarter of 2025, these were short-lived, and the index quickly regained the average. This dynamic suggests that dips have been bought aggressively, and the overarching trend remains positive.
Despite the persistent uptrend, recent price action hints at potential sideways movement ahead. The inability to extend meaningfully beyond the 6,980 to 7,000 resistance zone, and the slowing pace of gains beyond all-time highs, indicate that the market may be digesting prior gains and consolidating in a range. This transitional pattern is not uncommon following extended rallies, as investors await fresh catalysts or economic clarity to orient positions for the next leg.
This consolidation phase does not necessarily imply a shift in the longer-term trend, but rather a pause as the index balances technical resistance with the underlying bullish structure. Traders and investors should observe how SPX behaves around the important moving averages and Fibonacci levels, as these will be critical markers for determining whether the consolidation resolves to the upside or slips into a deeper corrective phase.
Looking ahead, broader macro factors could also shape market sentiment. The US Federal Reserve’s policy direction and commentary in early 2026 could influence risk appetite and volatility. Geopolitical issues also remain in the limelight and could also lead to more volatile swings for the index.
The writer is manager of dealing and investor education at Phillip Securities
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.