The S & P 500 index shows a significant loss of long-term upside momentum from a technical perspective on its monthly chart. The monthly MACD histogram has ticked lower, and the monthly stochastics are poised for an overbought downturn at the end of the month. The set-up supports a digestion phase for much of 2025, characterized by increased volatility and a sideways-to-lower bias overall. The so-called Magnificent 7 stocks have collectively seen a significant loss of long-term upside momentum in both absolute terms and relative to the S & P 500 (referred to often as ‘SPX’), suggesting they will continue to be a source of underperformance this year. The ratio of the Roundhill Magnificent Seven ETF (MAGS) has broken its 200-day moving average. At the same time, there is notable deterioration in market breadth relative to last year, noting only 53% of S & P 500 stocks are above their 200-day moving averages. Zooming in on the weekly bar chart, the S & P 500 is undergoing a correction that we think will deepen in early Q2. This is supported by our weekly indicators, which point decisively lower. We will be watching the weekly stochastics for an upturn from oversold territory to indicate an intermediate-term low, which seems more likely later in Q2. In the near term, the S & P 500 is at a proving ground as it tests support in the 5733-5783 zone, based in part on the 200-day MA. Market sentiment is at bearish extremes per the Fear & Greed Index, which is a potential near-term contrarian positive indication, although price action is more important. If the SPX closes decisively below support this week, it would mark a confirmed breakdown suggesting sentiment can get even more fearful before a meaningful low is established. Secondary support for the SPX is in the 5365-5385 area, based on the cloud model and a Fibonacci retracement level. In a year that is likely to be characterized by heightened volatility, defensive positions and conservative strategies that are characterized by a low beta and low correlation to the SPX hold appeal. Click here to view our latest monthly update for our own Fairlead Tactical Sector ETF (TACK). —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . DISCLOSURES: All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. 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