U.S. equities face “key defense lines,” testing bullish conviction; a break would confirm a downtrend into “early next year”

.S. equities stand at a pivotal technical juncture, with bullish conviction under significant scrutiny.

According to Chasing Wind Trading Desk, JPMorgan’s latest technical strategy report dated November 14 indicates sustained pressure on support levels across multiple key indices. Should these “defense lines” be breached, the market’s transition into a downtrend would be confirmed, with the correction potentially extending into early 2026.

The S&P 500 is currently probing an initial support near 6,700. If that level, the recent trough at 6,631, and the September–October range low around 6,525 are successively lost, a bearish reversal would be affirmed, with downside scope toward approximately 6,150. Among benchmark indices, the Russell 2000 exhibits the “most concerning” technical complexion, having already broken a critical structural support, thereby confirming a bearish shift and opening room for additional retracement.

S&P 500 index: three critical defense layers under scrutiny The report highlights three concentric support zones for the S&P 500, a bellwether for broader market direction.

The first layer comprises the 50‑day moving average and the channel trend line in place since May, now situated around 6,700. A failure here would likely prompt a test of the second layer—the recent low at 6,631. The final defense is the 6,525 range floor traced between September and October.

Analyst Jason Hunter notes that only a comprehensive breach of these three levels would confirm a trend reversal into a downtrend. In that scenario, selling pressure could intensify, with a prospective floor near 6,150 potentially defining the market’s low into early 2026.

Russell 2000 index: the most worrisome technical setup Within U.S. benchmarks, the small‑cap‑focused Russell 2000 shows the most fragile structure. The index closed last Thursday beneath the 2,380–2,390 support band established from September to November, having already lost its bullish trend support and the 50‑day moving average.

This sequence of breakdowns leaves the market vulnerable. Persistent closes below the cited range floor would validate a bearish reversal and open a path toward the 2,214–2,235 mid‑term support area. For bullish participants, reclaiming the 2,449 50‑day moving average and the 2,475–2,485 near‑term pivot zone is essential to stabilize footing.

AI leadership cohort under pressure, but not fully broken This year’s leadership group—AI‑linked equities—has also come under strain. JPMorgan’s “AI/Data Center/Electrification Beneficiaries Index” has slipped below short‑term trend support, yet it still holds the 79.88–80.00 structural support band, leaving a bearish reversal unconfirmed.

Should that band be decisively breached, vulnerability would increase, with potential follow‑through toward the next supports: the gap at 73.90 left on September 10 and the mid‑term base near 70. The report anticipates that if the index breaks and corrects this quarter, the 70–73.90 zone could mark its bottom into early 2026.

Signs of rotation: flows into healthcare, while materials meet resistance As AI leadership weakens, signs of rotation have emerged. The recent resilience of the S&P 500 equal‑weight index illustrates the shift, though it too shows waning momentum, with a key structural support near 7,500.

Healthcare stands out in this rotation, drawing capital leaving prior leaders; its sector index has reached the 1,778 target. Analysts advise against chasing strength at current levels, preferring accumulation on pullbacks during consolidation.

Meanwhile, materials have attracted some rotation, but the sector index’s rebound now confronts the 555–563 resistance band. Failure to clear this zone would keep the sector’s fragile structure intact; a subsequent break below 540 could invite a move toward the 511–518 mid‑term support.

Signs of rotation: flows into healthcare, while materials meet resistance With pressure persisting on AI and other leadership segments, rotation continues. The S&P 500 equal‑weight index’s firm showing is a case in point, yet its upside appears limited with crucial support near 7,500.

Healthcare remains a bright spot, having met the 1,778 target, but caution is warranted—pullback entries are preferable to chasing highs.

Materials also see inflows, but the advance has entered the 555–563 resistance area. Absent a breakout, technical fragility remains; a drop through 540 could usher in tests of the 511–518 mid‑term support.