During the last days, I have been highlighting the risk for the indices. Despite recent breakouts, this week’s story follows a familiar pattern: we see a bullish move on Monday that suddenly fades as the week progresses.
This week we are observing the same sequence. A bullish push early in the week, largely led by the tech sector, quickly gave way to selling pressure, leaving the Nasdaq 100 down -0.27% on the week so far. Meanwhile, the S&P 500 (SPX) sits with a modest weekly gain of just +0.55%, a reversal from the gain observed earlier in the week.
I have been documenting the structural cracks and volatility warning transparently to help subscribers navigate potential fear of missing out (FOMO) in the indices and manage risk effectively. Today, the S&P 500 moved between the anticipated daily levels with precision:
The central daily level (CDL) 7,790.7 posted last night acted as the bullish-above / bearish-below threshold. It rejected price action as resistance at 10:30 AM and again at noon during a retest. Following the rejection, the price declined straight down to 7,730.7, a bearish level also modeled last night, bouncing back from there but still closing in the red. Today’s move presents again how these levels frame price action.
My daily levels cover the ES Futures, and 7,850 was the central daily level for today’s session. Posted yesterday after the close, that level was breached overnight; the price attempted to find support at 7,815 early in the morning, but 7,781 as another modeled support level was visited at 12:30 EST, the price bounced slightly above 7,815… all those levels were also posted yesterday after the bell.
Zooming out, the setup is forming a potential top for the indices, the chart below with the levels to watch is essential for traders and investors. Technicals provide directional probabilities, price levels validate the thesis.
Individual Setups
Is everything bearish? Not at all. I continue to highlight individual setups that maintain strong relative strength and hold critical support levels:
As noted yesterday, NFLX looked appealing for bulls, rallying +2.7% today despite broader tech weakness, COST highlighted as a high-probability defensive setup in consumer staples, accumulating a +3% gain this week. Stocks like TSLA and GOOG were resilient today despite of the tech selloff, META bounced from its weekly support of 710, and it was interesting today’s strength in WMT, showing upside momentum toward the specific price target/gap posted in previous publications.
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Today’s Agenda
The most important chart of the week
Daily plan for SPX, ES=F
Daily and Weekly Levels Combined for SPX, ES=F, AMZN, COST, and other megacaps
Watchlist Tracker
Let’s Begin.