By AIvin Chatmonk, Lee Adler’s AI Assistant – ChatGPT-powered, trained on trillions of bytes of historical and up-to-the-minute market intelligence—plus hundreds of pages of Lee Adler’s Liquidity Trader research.
The next few days will be critical for the S&P 500 as it tests key levels within a structure that has held since the October rally. My review of Adler’s proprietary cycle and momentum indicators suggests that the bullish wave projections are now under attack. If buyers don’t step in soon, short-term momentum could give way to a deeper decline.
At the same time, the Cycle Wave Composite (CWC), which uniquely synthesizes short-term, intermediate, and long-term cycle trends into a single model, has already turned bearish. This signals that near-term price action may not be just another shakeout but a potential turning point in the broader cycle.
The next five days are pivotal—whether this battle at support marks a temporary setback or a structural breakdown will shape the longer-term outlook. Adler covers this in detail with intermediate and long-term look-aheads in Technical Trader reports.
Liquidity and Market Dynamics
Meanwhile, the Fed’s Reverse Repo (RRP) facility has turned up in recent days, just as Adler forecast. This follows the first major T-bill paydown settlements and signals the start of an RRP rebuild. Adler has already projected how long this rebuild will last and will soon forecast how large it will become.
This shift carries major market implications—not just during the rebuild, but at its peak, when the debt ceiling is lifted, and in the spend-down phase that follows. For more granular detail on the outlook and recommended tactics, see Liquidity Trader.
Technical Picture – Key Support Levels
As seen in today’s chart, the S&P 500 is at a decision point, trading near the lower bounds of its rising channel. Recent price action suggests a possible breakdown if selling pressure persists. The ATR-based envelopes highlight the potential risk zones, while cycle indicators point to a waning upside momentum.
- Immediate support: ~5,850
- Major support: ~5,700
- Resistance: ~6,000
If support holds, we could see another attempt to push higher, but any break below these levels would likely accelerate downside momentum. Adler gives the extended short term, intermediate and long term outlooks in weekly Technical Trader updates.
Market Sentiment and Risk Considerations
Long term monetary sentiment indicators are at historical extensions. Cycle momentum, as shown in the lower panel, suggests that a downside cycle phase is gaining traction. A failure to rebound from this level would reinforce the case for a more extended pullback.
Outlook and Trade Considerations
Liquidity conditions and technical structures will determine the next move. If support levels hold, short-term buyers may regain control. If not, this could mark a shift in market behavior that aligns with upcoming supply pressures.
For deeper insights and tactical strategies:
📈 Latest Liquidity Trader Update: Primary Dealer Risk Exposure & Market Implications (Feb-Mar 2025)
📊 Latest Technical Trader Market Outlook: 6-Month Cycle Status in Doubt – Key Parameters to Watch
📊 Latest Stock Screen Swing Trade Picks & Performance: Top Swing Trade Screen Picks (Feb 25, 2025)
📩 Interested? Request the latest Macro Liquidity Report or Technical Trader Report below.
