The SPX is down -1% so far this week, losing its central weekly level of 7,707.1 as anticipated on Saturday and breaching the bearish target of 7,642. The index is currently testing the critical 7,638 zone; if it isn’t reclaimed quickly, the downward move could gain momentum. Meanwhile, the VIX, which was hovering at year-to-date lows and primed for a bounce, has rallied +13% this week alone.
Once the ES=F lost the anticipated Central Daily level of 7,700 overnight, the bearish continuation was triggered to start the month. The E-mini futures found temporary morning support at 7,651 before breaking lower to test the final line of daily defense at 7,627. All of these levels were modeled yesterday in advance, and the price action confirms how institutional algorithms react to them. Once futures broke their CDL, the anticipated SPX daily support levels came into play during market hours: 7,668 and 7,635 framed price action from the open until 2 PM, when that final daily support of 7,635 broke down and flipped to resistance.
Much like the SPX, the Weekly Compass pointed to a high-probability move for the IWM. While we initially looked for a visit toward 290.6 (-1.1%), today’s price action pushed even lower, nearing 289 for a -1.7% weekly decline so far.
The Weekly Compass is available here for anyone who hasn’t read it yet:
September is Coming
The S&P 500 is heading into a turbulent seasonal month. Over the last 40 years, the SPX has seen a positive close in September just 48% of the time. This is well below the 72% historical positive average that I mention as the benchmark based on the last 70 years; anything notably above or below that reference gains relevance. Worth noting as well, the average move for September over the past 40 years has been -0.84%.
This is a week where the Magnificent Seven could play a reversal role in a weak market. On Saturday, we highlighted mixed setups across the group (AAPL, MSFT, NVDA, GOOG, AMZN, META, TSLA). We are already seeing significant divergence among them, including yesterday’s +5.5% surge in TSLA (which consolidated today), a +2.6% rally in AAPL today, and resilience from META as it continues to hold its demand zone bouncing from there one more time.
My bearish thesis on MSFT continues to play out with a -2.4% move, while GOOG and AMZN have broken below key weekly levels, shifting constructive structures into potential bearish continuations. That said, both could find a floor at any point: GOOG printed a doji at weekly support today, and AMZN did the same right at its 50-day moving average.
The SPX is actively working toward a gap-fill, while the remaining Magnificent Seven names could bounce at any moment, just as TSLA and AAPL did this week.
Today’s Agenda:
Daily Plan for SPX and ES=F
Daily Plan for AAPL, TSLA, GOOG, AMZN, and META
Combined Levels for SPX, ES=F, and all of the Magnificent Seven