Technicals versus the outlook: Nikkei and S&P 500HSBC's Q4 view rests on broadening earnings rather than stretched multiples, with a specific tilt toward the US and Japan. The weekly charts on both indices are broadly consistent with that framing, though they are not telling identical stories right now.Nikkei 225: uptrend intact, range compressingThe multi-year advance off the 2025 low remains structurally intact, with price still above the long rising trendline that has defined the trend since the low near 51,000 in March 2026. More recently, though, the weekly highs have been stepping lower, from the late-June peak near 73,600 down through the August high around 69,600 to current levels near 63,700. That combination, a still-rising support line underneath and a descending line of lower highs above, is producing a converging range rather than an outright top.That fits comfortably with HSBC's more constructive Japan view. Corporate governance reform and gradual BoJ normalisation are longer-run supports, and the chart shows the primary uptrend has not been broken, only that momentum has cooled into a squeeze after a very sharp June rally. A move that reclaims the upper 60,000s on a closing basis would support the case that this is a pause within the trend rather than a reversal.S&P 500: still stair-stepping, but the latest step is smallerThe S&P's advance since the 2025 low has come in a series of consolidation shelves followed by breakouts, most visible around 6,100, then 6,900-7,000, then 7,500, each one a base before the next leg higher. That pattern is intact, and it is consistent with HSBC's read that earnings, not multiple expansion, have been doing the work.Worth noting gently, though: the size of the advance from the last shelf near 7,500 to the recent high around 7,800 was noticeably smaller than the two legs before it. Price has now pulled back into the 7,570-7,650 area, which is close to the last shelf itself. The uptrend structure has not been broken, but this latest leg has been shallower, so the current pullback into support is a more meaningful test than prior ones. A hold here would keep the stair-step pattern going; a clean break of the 7,570 shelf on a closing basis would be the first real dent in that structure since the rally resumed in April.What to watch nextFor the Nikkei, a decisive close outside the 59,000-66,000 compression zone in either direction. For the S&P, whether the 7,570-7,600 shelf holds on a weekly close, since a break there would carry more weight given how the last leg higher has already lost some of its earlier thrust.Educational takeawayA trend can remain technically intact even while each new leg gets smaller. That loss of thrust is not the same as a reversal, but it is often the first visible sign that a market wants to slow down or requires more time to build a base before the next advance is confirmed.Technical levels and indicators provide reference points, not guarantees. Market conditions can change quickly, particularly during periods of high volatility. Trade or invest at your own risk and use risk controls appropriate to your circumstances. This article was written by Eamonn Sheridan at investinglive.com.