S&P 500 set for ‘total collapse' if this level fails to hold, according to expert

• The S&P 500 broke below its 100-day moving average for two consecutive weeks, marking the first clear bearish signal, with the 50-week MA at 6,500 now acting as final support
• If the 50-week moving average fails, analysts project a potential decline to 5,700-5,500 (18% drop from 6,716), mirroring historical corrections of 21.8% to 27.6%
• The warning comes amid narrow trading ranges in March, with the market showing resilience despite oil price spikes near $100 per barrel and geopolitical tensions in the Strait of Hormuz

Summary

Critical Technical Levels

Trading expert TradingShot warns the S&P 500 faces a potential "total collapse" if key support levels fail. The index recently closed two consecutive weekly candles below its 100-day moving average, marking the first clear bearish signal. The critical support now stands at the 50-week moving average around 6,500, which aligns with a historical arc-shaped topping pattern that has preceded sharp corrections.

Downside Projections

If the 50-week MA breaks, analysts project a move toward the 200-week moving average, with potential declines of 21.8% to 27.6% based on historical patterns. The long-term accumulation zone is estimated between 5,700 and 5,500, aligning with the 2.382 Fibonacci level. From the last closing value of 6,716, this represents an 18% drop at the lower end.

Market Context

The weekly RSI currently hovers in the mid-40s, similar to conditions during the 2022 inflation bear market and 2025 tariff sell-off. The index has traded in a narrow range in March, rebounding from dips related to oil supply concerns in the Strait of Hormuz, where crude prices spiked toward $100 per barrel.

Despite technical warnings, analysts remain cautiously optimistic for 2026, citing solid corporate earnings growth, AI productivity gains, and economic resilience. The market has shown underlying strength with limited sell-offs and rotations into energy and defensive sectors. Investors await the Federal Reserve's upcoming meeting for rate guidance amid heightened uncertainty.