SPX | Testing the Upper Flag Line After AVWAP Shifts

The index has steadied as broader sentiment firms, with markets leaning on softer inflation trends and a more patient Federal Reserve tone. That backdrop has helped risk appetite rotate back into equities after the recent pullback.

Technical Lens:

The chart shows SPX rebounding cleanly from the lower boundary of its broader bullish channel, which also aligns with the anchored VWAP drawn from the August 2025 swing low. That confluence provided a strong reaction zone. Price has since pushed through the anchored
VWAP set from the 29 October high, suggesting momentum is shifting back towards the upper side of the structure. The index now sits just beneath the upper boundary of the short-term bull flag, and this zone becomes an important area to monitor as it acts as the immediate ceiling.

Scenarios:

• If the upper flag line gives way, the move could open room for continuation along the channel towards the next structural resistance zones.
  
• If the flag line holds, the market may consolidate or retest the mid-channel levels, with the prior AVWAPs acting as nearby reference points.
  

Catalysts:

US GDP revisions, PCE inflation data and major tech earnings later this week may be the triggers that decide whether the index pushes through or pauses here.

Takeaway:

This upper flag boundary is the key inflection point for SPX, with the anchored VWAP shifts helping define the directional bias.