S&P 500 critical technical defense line in emergency! With the bears raging, the army of bottom fishers is closely watching the next support level.

The spiral exacerbation of the sell-off in technology stocks is pushing the S&P 500 index towards the edge of a critical trend line cliff. Traders are carefully studying charts, trying to determine how far this market "barometer" will continue to decline. On Thursday, amid concerns over the spread of the artificial intelligence shockwave to a wider market, the index fell by 1.2% to 6798.40 points. According to market technical analysts, it briefly fell below the 100-day moving average line (approximately 6797 points) that has been acting as support since May 2025. "The S&P 500 index rebounded strongly from this line in November last year," noted Matt Maley, Chief Market Strategist at Miller Tabak & Co., "So, if it effectively falls below this line, it will signal some warning signs." He added that for chart observers, a continued fall below the 100-day average line would mark a shift in market trend - the market had been steadily climbing since hitting bottom in April 2025 due to tariff-induced selling. "Choppy Hell" and Options Adding Fuel to the Fire The ongoing sell-off that has led the S&P 500 index to fall about 2.6% from recent highs showed little sign of easing on Thursday. Weak job data exacerbated the decline, and concerns about how the latest developments in AI will affect software company valuations were the main cause of this decline. Alphabet (GOOGL.US) also joined the downturn after announcing its performance. Options research firm SpotGamma pointed out that the decline in the S&P 500 index is being exacerbated by options market makers being forced to adjust hedging positions and selling off in a falling market, a dynamic known as the "market maker negative Gamma effect" that has begun to manifest itself during the recent intensified sell-off. Founder Brent Kochuba wrote in a client report, "If we continue to stay below 6900 points, we believe that market clearing is still a possible outcome and will focus on 6675 points as a major downside support level." Piper Sandler's options business head Daniel Kilsh said that the market maker negative Gamma effect makes the area below 6900 points a "choppy hell" for traders in the coming weeks. He added, "This is the first time we've seen real hedging demand buying during this round of decline journey for about a week." Next Line of Defense According to Ali Wald, Technical Analysis Director at OBENheimmer, the next key level to watch is 6520 points - a level that is both last year's low point for the index and roughly intersects with its 200-day moving average. "As long as the index remains above this key support level, the uptrend should be considered intact," he said via email, "Once software stocks stabilize, the market should stabilize as well. Currently, this is still a vulnerable area." Wald believes the key support level for the hard-hit iShares Software ETF is in the $74 to $77 range. This marks a critical retracement of the gains from 2022 to 2025 for the ETF, and coincides with the lows of 2024 and 2025. Thomas Sandton, founder of Hedge Fund Telemetry, said he is closely watching the 6600 point level of the S&P 500 index, which roughly corresponds to the lows touched in October and November last year. "If this level is breached, I see 5600 points or even 4800 points as possible lows," he said, "Passive fund investors have been buying on dips, and they may do the same this time. But if the decline is deeper and lasts longer, they may hit the 'sell' button."