War Escalates, S&P 500 and Nasdaq at Risk of Decline

This weekly open is lining up to be a volatile one — especially for American markets.

On the technical side, the S&P 500 and Nasdaq 100 weekly charts are flashing warning signals. The S&P 500 has printed a tweezer top, a potential bearish reversal pattern, while the Nasdaq 100 appears to have formed a failed breakout above the Value Area High (VAH) — hinting at fading momentum.

Fundamentally, tensions in the Middle East have escalated. Over the weekend, the U.S. conducted a surprise military operation linked to the ongoing Iran-Israel conflict — despite President Trump having previously issued a two-week ultimatum for Iran to de-escalate. The early strike caught markets off guard, and 24/7 assets like Bitcoin reflected the risk-off mood, tumbling more than 4.5%.

If equities follow suit, conservative downside targets sit around the 4–5% range, but an extended correction of 6–7% can’t be ruled out in the short term. There’s also a case to be made about the yearly top being in — resulting in a 20% correction.

Either way, it would not be surprising if markets take on a risk-off approach this week.

S&P 500 Downside Targets

T1 — Market Gap at $5,713 and $5,767

• Aligns with the latest FRVP’s liquidity void — signalling the gap’s magnetic effect could still be in play
• Aligns with the Oct 2023 FRVP’s high volume node — signaling historical interest at these prices

T2 — Anchored vWAP Cluster at $5,672.30 and $5,680.84

• vWAP anchored at All-Time Highs, comes in at $5,680.84
• vWAP anchored at m March Lows, comes in at $5,672.30
• Aligns with high volume node at $5,625.44, which is near the 38.20% Fib at $5,591.69

T3 — Larger Correction down to 50% Fibonacci Retracement at $5,447.22

• Aligns with Oct 2023 FRVP high volume node at ~$5,470

NASDAQ Downside Targets

T1 — Low volume node/ Thin profile at $20,248 to $20,695 range

• Aligns with the latest FRVP’s liquidity void
• Aligns with the Oct 2023 FRVP’s high volume node, at around $20,376

T2 — Anchored vWAP Cluster at $20,047.7  and $20,159.2

• vWAP anchored at All-Time Highs, comes in at $20,047.7
• vWAP anchored at m March Lows, comes in at $20,159.2
• Aligns near high volume node at $19,750, which is near the 38.20% Fib at $19,864.4

T3 — Larger Correction down to 50% Fibonacci Retracement at $19,182.0

• Aligns with Oct 2023 FRVP high volume node at ~$19,060

Final Thoughts: Is the Yearly Top In?

If tensions escalate or drag out, a deeper correction toward the March 2025 lows would align with a larger ABC corrective structure — a common outcome in geopolitical-led pullbacks. While bulls still hold structural control, the current confluence of technical weakness and geopolitical uncertainty adds fuel to the bear case.

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