SPX continued the trend of huge swings today, posting a range of about 133 points. Yesterday we saw SPX move 144 points from low to high and on Friday we saw 122 points. We are consistently seeing swings of 2% or greater on the SPX on an intra-day basis. This type of volatility is rare, but can provide a lot of insight into market psychology.

Typically, these types of swings are seen during the start or end of a bear market. While I am not saying we are in a bear market, it is noteworthy that the Nasdaq 100, or NDX, has corrected 9.8% from the highs on 2/19 to the lows of today. 10% officially puts it into correction territory. NDX certainly knocked on that door today.

SPX nearly hit the 2-standard deviation mark to the downside this morning. The low today was 5732 while the 2SD level sits at 5710. Also to note, 5732 is almost 100 points lower than the lower end of the expected range.

As we have been talking about, the daily chart does not look bullish at all, and the candlestick patterns reflect that.

I want to also quickly highlight the intra-day move today, especially the sharp selloff we had at the end of the day. SPX spent a large portion of the day recovering and most of it was erased in just 30 minutes as we can see from the large red candles at the end.

This reversal is very significant because we were not able to hold the lower end of the expected move and closed below it.

I also want to take a moment to note that the SPX almost hit the 200-day moving average. The last time we touched it was in October 2023.

This is a significant level and currently sits near 5725.89 but is trending up. The level is dynamic but should stay around 5726 for the rest of this week.

In any case, it is worth noting that breaking below this level could be significantly bearish. It is also worth noting that SPX also hit levels from before the November election, wiping out all of the post-election gains.

VIX also continued to spike above the red line today, hitting a high of 26.18 today. This is the highest VIX has been since late December. Breaking over 30 could send the market into a real downward spiral.

NVDA retook the lower grey box today but is still showing weakness. A close over 120 could signify a reversal but we are still a bit away from that.

TSLA also made new lows for the current down move today, almost getting to the lower end of the grey box and filling the gap from the post-election rally.

Overall, things are very bearish but as I have been mentioning, we are overdue for a bounce. The market is oversold in the short term and a bounce would be healthy. However, it is not guaranteed. There is real fear and panic starting to kick in for the first time in a long time and we could see the selling pressure continue without any breathers.

The goal is to trade small and cautiously, watch the key levels and be ready to change sides as the market moves. It’s a great market for traders and the best thing to do is to trade the trend.

Good luck!