As mentioned on Saturday in the Weekly Compass, “A temporary relief spike on Monday is possible,” and that is what the price action presented today. The reason is simple: short-term timeframes were extremely oversold. As usual, the levels played a critical role today. Price action revolved around the Central Daily Level of 7,431, attempting to move north, but the CWL provided to our premium subscribers acted as precise resistance.
Price action printed an inside candle for the NDX and key ETFs like IWM and SMH. Inside candles reflect market uncertainty with neither side establishing clear directional control. We will study below how to navigate them.
The market presented a mixed appetite across growth, energy, and cyclical sectors. Theoretically, it is bullish when the technology sector leads the day, with XLK gaining +2.2%, followed by energy (XLE) at +1.1% and discretionary (XLY) at +0.5%, however, clear indecision persisted when checking their respective charts. On the downside, sellers showed true conviction, printing long red candles in materials (XLB -1.3%), real estate (XLRE -1.5%), and utilities (XLU -1.9%). This highlights an ongoing internal debate between growth and defensive positioning, with no clear, unified direction yet.
On the crypto side, the bounce anticipated in the Weekly Compass is gaining validation, with IBIT bouncing +5.1% and ETHA gaining +7.2%. Finally, TSLA also printed an inside candle, forming an interesting technical structure.
Let’s dive into the key SPX levels for tomorrow’s session, alongside the setups for the top and bottom performers of the day across our watchlist.