(Part 2 of 3) S&P500 technical analysis (12Oct2026)
INVESTING PREVIEW (12Oct02026)
II. S&P 500 Technical Analysis
The S&P 500 reached a record 7,819 on October 6, breaking above its August high after two quiet months.
Still, momentum is weaker than it was in July. The RSI, a measure of market strength, has fallen to 55 from 75. The VIX is also low at 14.8, which suggests investors may be too relaxed ahead of Wednesday’s inflation report.
I’m watching three levels: 7,800, 7,700 and 7,550–7,575. Holding above 7,800 would support the breakout. A drop below 7,550 on a Friday close could open the way to 7,350. The trend is still up, but I do not want to chase it before the inflation data.
Michael Burry warns that investors are in denial. That may be true, but the market is still at record highs and the trend remains positive. I’m taking the warning seriously without betting against the market yet.
The Magnificent Seven and the Rest of the Market
Market leadership changed in 2026. The S&P 500 is up about 14.9%, while the Magnificent Seven gained less. The other 493 companies did better, rising about 16%. That is healthy, but gains narrowed again in the third quarter. The ten largest stocks now make up roughly 38–40% of the index, creating heavy dependence on a small group of companies.
Borrowing has also increased. Margin debt is near a record $1.5 trillion, leaving investors with less room to absorb a fall. Strong earnings and deep markets are positives. But high leverage and market concentration could make any sell-off faster and more severe.
Key levels to watch: around 7,250 for the S&P 500, $4,000 for gold and $75,000–$80,000 for Bitcoin. Breaking those levels could trigger more selling, especially among leveraged investors.
Bottom line: the market is strong, but it is also fragile. I want to stay invested without taking unnecessary risk.
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- OswaldFinger·14:14TOPVIX at 14.8 is cheap complacency, and the put call ratio still not lifting into Wednesday matters more to me than 7800LikeReport