Doji candle Signals Pause amid record bull run
7-7-2025
From the Trading Desk at Stipelis:
S&P E-Minis at Record Highs
The S&P 500 E-mini futures continue to hover near record highs, with the current price at 6301.25, just shy of the recent peak of 6333.25. The market has shown remarkable resilience, climbing over 30% from its recent low of 4830.00. The year-to-date gain stands at 6.55%, reflecting strong bullish sentiment.
Technically, the chart reveals a doji followed by two short green candles at the highs, a classic sign of market indecision. While this could indicate a potential reversal, the broader trend remains bullish. The 50-day and 200-day moving averages are trending upward at 5912.35 and 5874.815 respectively, reinforcing the positive momentum.
Volume, however, tells a different story. Thursday’s volume of 679,175 is significantly below the 20-day average of 1,483,272, marking a 54% decline. (Thursday was the eve of the 4th of July, which came on Friday this year.) This divergence between price and volume could suggest weakening conviction among buyers.
The Relative Strength Index (RSI) is at 72, indicating overbought conditions. Similarly, the Stochastics %K and %D are at 92 and 96 respectively, further supporting the overbought narrative. Despite this, the Directional Movement Index shows a strong +DI of 34 versus a -DI of 12, with an ADX of 23, suggesting the trend still has room to run.
Key support levels to watch include the daily pivot at 6309.33, and support zones at 6285.42 and 6246.58. On the upside, resistance is seen at 6348.17, 6372.08, and 6410.92. The weekly and monthly pivots at 6280.25 and 6124.17 respectively provide broader context for trend analysis.
Fibonacci retracement levels from the recent high suggest potential pullbacks to 5825 (1/3), 5575 (50%), and 5325 (2/3). These levels align closely with the Donchian low of 5927.50 and the monthly support at 5982.83.
In summary, while the short-term trend remains bullish, the appearance of a doji and declining volume warrant caution. Traders should monitor price action closely around key pivot levels and be prepared for potential volatility. The market may be due for a consolidation phase before the next leg higher.
Stephen Coleman Head Market Strategist