The S&P 500 index has been moving within an ascending channel since the COVID peak in 2020,

maintaining the same angle for more than five years.

In recent months,
the S&P 500 index exited the top of this channel forcefully through ‎$SPX ,
and that in itself is a rare move that doesn’t happen often in the index’s history.

The price is now hovering around the Fibonacci extension zone of 1.618 at approximately 7,425 points,
which is the same level the index is currently trading at near 7,475.

The next target on the same extension is the 2.618 level at 8,111 points,
which explains the market talk about the 8,000 number.
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However, breaking out of the channel doesn’t always mean the rise will continue at the same angle.

In most historical cases,
when a major index breaks out so sharply from its multi-year extended channel, one of two things happens:

- A strong continuation outside the channel forms a new higher channel,
- or a quick return to retest the old channel’s top as support.

The notable technical point here is that the index hasn’t moved far from the channel’s top afterward,
meaning both scenarios are still strongly on the table.
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Now it’s your turn.
Which of the two scenarios do you think is closer to your read?

Momentum continuing toward 8,000 points before the end of the year,
or the index returning to retest the channel again?
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