SPX finally saw some downside action today, but for the most part it was pretty tame. It seems that 7050 is the important key level to the downside, as this level was tested today and held. This was the high from last Thursday and SPX tagged it almost perfectly.

As usual, the dip was bought and there seems to be more (repeated) good news coming from the Iran situation. I think a lot of dip buyers were waiting for a down day before getting in and we saw a lot of individual tickers turn around and end the day green even though SPX was red.

The daily chart is finally showing some signs of slowing down, as the verticality seems to be coming to an end. At the very least, the streak was broken. SPX could just continue running tomorrow on the back of this ceasefire being extended news, but I suppose we’ll have to see how that plays out. For the time being, 7150 seems like some good resistance to the upside.

Funny enough, SPX was only about 35 points away from the lower end of the expected move. The expected move has become significantly smaller compared to a month ago, and now even just one day of elevated volatility gets us there.

Speaking of which, VIX did break 20 today but failed to close there despite SPX closing almost at the low of the day. It’s also interesting that for the 2nd day in a row, VIX was up when SPX was also green. Overnight we saw /ES almost make a new all-time high and SPX was looking like it was going to rally this morning. Despite that, VIX still opened green and stayed that way throughout the session.

23 is the more important number for VIX, but for now that 17 level to the downside has held. I think we would need to see another epic rally like last week to really push VIX down. If SPX continues to chop around at this level, I expect VIX to stay steady around the 18-20 area.

SPX holding that 7050 level is significant, especially since we bounced a little into the close and now futures are rallying afterhours as of writing this.

As long as 7050 holds, SPX should have an upside bias. Breaking below could cause SPX to retest 7015 (lower end of the expected move) or even 7000.

All we can hope for is that two-sided action is back in the market. Watch price action at the key levels tomorrow and see if SPX reverses or breaks through. If SPX can retake 7080 and 7100, then there is a good chance we test the highs.

Good luck!