Critical Test for S&P 500 BullsUS SP 500 CFDFOREXCOM:SPX500FOREXcomThe S&P 500 has broken lower from the symmetrical triangle that had been coiling price action for much of the past week and a half, bringing the 50-day moving average into focus. That's an important level. The last two times the price tested and briefly broke beneath the 50DMA, buyers stepped in aggressively, helping to fuel some pretty decent rallies. Whether we see a similar response this time around may tell us plenty about where the market wants to go next. The upside momentum that fuelled the rally from the April lows through to early June looks to have largely dissipated. RSI(14) is trending lower and now sits marginally beneath the neutral 50 level, while MACD has crossed below its signal line and is edging towards flipping negative. They're not outright bearish signals, but they do suggest the market is no longer enjoying the same tailwind seen just a few weeks ago. Rather than trying to predict the next move, I'd prefer to see how the price behaves around the 50DMA. If the level gives way, 7,311 is the first downside target, marking the 23.6% retracement of the April-June rally. Beyond that, the early June swing low at 7,225 and then 7,192 come into view. However, if the price can hold the 50DMA and attract buyers once again, 7,412 is the first level to watch overhead, having repeatedly acted as both support and resistance earlier this month. A break above there would bring 7,506 into focus, with the record highs beyond. The one thing that has shifted notably over the past couple of weeks is the Fed. The June FOMC delivered a hawkish surprise and markets have responded by entertaining the possibility of renewed tightening, a dramatic shift from the start of March when traders were still pricing around three rate cuts over the following 12 months. That's not something that can be ignored. While demand for the AI buildout appears relatively inelastic, with many of the large-cap names likely to keep spending regardless, higher borrowing costs still matter for the broader economy and valuations. That may tilt the balance of risks marginally lower than it did a few weeks ago. However, with the price sitting on a level that has repeatedly attracted buyers in the past and momentum indicators sending a broadly neutral signal, I'd prefer to let the price action dictate the next move rather than force a directional view. Good luck! DS