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Saturday's Bonus Article S&P 500 Fires Buy Signal With 100% Accuracy Rate: What Comes NextReported by Thomas Hughes. Published: 3/25/2026. 
Key Points - The S&P 500 entered oversold territory in March, triggering a buy signal with 100% accuracy.
- The index faces headwinds, but fundamentals and earnings outlook offset it.
- Oil and inflation are risks that may keep the market trending sideways in the near-term.
- Special Report: Elon's "Hidden" Company
The S&P 500 entered oversold territory on its weekly candlestick charts late in March, triggering a buying signal with a 100% accuracy rate over the trailing 15-year period. Oversold, as indicated by the stochastic indicator, means the market has been pushed below its true value—most sellers who needed or wanted to exit likely already have—leaving buyers (or at least a buying bias) to dominate. In that environment, the index has limited room to fall, and the resulting upward bias has already been confirmed. Technical, Analysts, and Valuation Trends Converge: Upside Potential Offsets Risks Chart watchers will note there were three such signals in 2023. The first produced only a tepid rebound, but it was followed by two stronger signals that led to larger gains and a full market reversal. That 2023 reversal was driven by AI and produced roughly a 50% increase in the index. Your electric bill is up 42% since 2019, and utilities requested $31 billion in rate hikes last year alone. The culprit: AI data centers consuming power at a scale the grid was never designed to handle. The last time a bottleneck like this formed, three overlooked infrastructure stocks surged 1,700%, 1,900%, and 900% before Wall Street caught on. One analyst has identified the next candidate - earlier in the cycle, smaller, and positioned at a chokepoint that even the largest players cannot build around. See the one infrastructure stock Wall Street is about to chase The takeaway for investors is similar today: near-term headwinds may mute price action, but fundamentals and long-term forecasts provide support. The likely path is consolidation within the current range followed by a move to new highs later this year. Analyst sentiment supports this view. Barclays is the latest firm to raise its target for the S&P 500 Index, citing stronger-than-expected earnings and more constructive forecasts that offset macro headwinds. It raised its index target to 7,650, a 250-point increase that places the index at the high end of its expected year-end range.  Value is present, if not uniformly across all sectors. The S&P 500 traded near 20X earnings as of late March, in line with long-term trends, while some market leaders appear relatively inexpensive. NVIDIA (NASDAQ: NVDA)—the single most influential stock in the index, representing roughly 7% of the S&P 500's market value—trades around 20X current-year earnings, which implies little to no premium for the world's leading AI company. NVIDIA and other blue-chip tech names typically trade in the 30X–35X range when fully valued, suggesting potential upside of 50%–75% from valuation expansion alone. Some forward earnings forecasts that value the stock at roughly 5X expected 2035 earnings imply upside for this leader in the hundreds of percent (estimates cited range as high as 400%–600% under those scenarios). S&P Set Up to Hit 7,500 This Year The critical support and resistance levels for the S&P 500 Index are 6,521.92 and 6,993.48. (For the S&P 500 Index Tracking Stock (NYSEARCA: SPY), the price equivalents are $64.72 and $69.78.) Support is likely to be robust but could break; if it does, the next support zone would be near 6,400 (about $64 on SPY). Resistance may remain firm until headwinds ease, keeping near-term upside capped at roughly 471 points for the index (about $4.75 on SPY). Over a longer horizon, adding that 471-point range to the resistance level implies a move to roughly 7,464 for the index (about $74.65 for SPY) as a minimum upside target, with 7,500 at the higher end. The catalyst for such a move will likely be multifaceted, including easing macro pressures, but it will be centered on the earnings outlook. Current forecasts call for sequential earnings growth acceleration starting in Q1 2026 and extending into Q2 and Q3, with high-teens growth projected through year-end. Trends suggest leaders such as NVIDIA will continue to outperform, pointing to a stronger finish for the benchmark and average companies outperforming by roughly 3%–5%. Earnings season kicks off in mid-April when JPMorgan Chase & Company (NYSE: JPM) reports, but the biggest market-moving results may arrive later in the cycle when NVIDIA and other AI powerhouses report. Among the key risks is oil. The conflict in Iran has pushed oil prices toward long-term highs, adding to cost pressures and inflation throughout the system. At these levels, oil can negatively affect earnings and corporate guidance, potentially leading to underperformance. Persistently high oil prices and sticky inflation could also keep the Federal Reserve from cutting rates, another hurdle the market would have to clear. |
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