The stock market may be soaring, but here’s where the sellers are likely waiting (2025)

Tomi Kilgore

Wed, Apr 9, 2025, 5:42 PM 5 min read

The stock market soared Wednesday after President Donald Trump essentially erased the possibility of a worst-case scenario — for now — but that doesn’t necessarily mean the selling is over.

As dramatic as the bounce was, there’s reason to believe that sellers still have positions they want to move, and they may even be hoping for a bit of a bigger bounce so they can start unloading.

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The S&P 500 index SPX shot up as much as 10% to an intraday high of 5,481.34 after the announcement of a tariff “pause,” before paring some gains to close up 9.5% at 5,456.90.

That mercifully halted a four-day, 12.1% tumble to Tuesday’s 11-month closing low.

A selloff that sharp tends to leave a number of resistance levels in its wake, as those who wanted to sell either couldn’t react fast enough or chose not to sell into a falling market.

The first big resistance level was the gap in the charts created on April 4 between that day’s intraday high of 5,292.14 and the April 3 low of 5,390.83.

Gaps created on declines often act as resistance when revisited because they depict areas where investors were unable to act. So investors looking to “sell on a rally,” as the saying goes, can now act when given the chance.

The S&P 500 had a little trouble with that resistance zone in afternoon trading, but it broke through with the help of surge in the final hour before the close.

There is also a big price gap just above current levels that was created on April 3 after Trump’s “Liberation Day” tariff announcement. The intraday high that day was 5,499.53, well below the April 2 low of 5,571.48.

Another aspect of price gaps is that they often act as a vacuum. As a declining market looks for areas to consolidate on a bounce, gaps can look attractive given that the market hadn’t actually seen those levels on the way down.

Many chart watchers assume that eventually, all price gaps will be filled.

While there are some technical signals to suggest Wednesday’s bounce can continue (see below), BTIG technical analyst Jonathan Krinsky doesn’t believe, under current conditions, the market has the strength to fill the April 3 gap before the selling resumes.