Stock Index Futures Turn Lower as Bond Yields Climb

The S&P 500 at 6775.80 is approximately 2.9% below its all-time high of 6978.60, exhibiting a clear distribution pattern over the last 6 sessions: 6869.5 → 6740.02 → failed bounce to 6795.99 → renewed weakness at 6775.80. This sequence of lower highs and failed recovery attempts following the yield shock is technically bearish. Monthly volatility of 3.59% implies a 1-sigma monthly move of ~$243 points, meaning current drawdown is well within normal noise BUT the directional momentum has shifted. Rising bond yields compress equity multiples via higher discount rates, particularly damaging in a market trading at elevated P/E multiples after three consecutive strong years. The -1.66% trailing 12-month trend is the first meaningful inflection after the 2023-2025 bull cycle, suggesting institutional rotation is quietly underway. ⚡ DEEP SONNET: Fade any intraday bounce toward 6820-6850 resistance (prior support now resistance). Avoid chasing the short at current levels; wait for the dead-cat relief rally which historically materializes 1-3 sessions after initial yield shock. A retest of 6830 with declining volume is the optimal short entry. | TP:4.5% SL:2% | 2–5 weeks | Risk:MEDIUM — Bearish thesis is directionally sound given yield-equity inverse correlation and extended valuations, but the market remains within 3% of all-time highs and macro data could stay resilient enough to delay the correction. The primary risk to the bear case is a Fed pivot signal or surprise disinflation print that collapses yields. Near-term technical support at 6740 is the critical line — a close below this accelerates downside. | Sizing:CONSERVATIVE