SPX attempted to push lower again today, but dip buyers stepped in at the key levels and were able to erase a lot of the losses. At one point, SPX was down over 80 points on the day and things were starting to look ugly.

Coming into today, one of the key levels to the downside that I mentioned was 7425. The idea was that if SPX broke 7475, this would be the next magnet. The low today ended up being 7421 and SPX bounced pretty hard from this level.

The daily chart does a good job of painting the dip buying from today. We have a green candle on a day where SPX closed down and a very long wick to the downside. We did briefly pierce through the 7427 low from last Tuesday, but sometimes momentum causes SPX to overshoot levels by a few points.

We are passed the halfway point of the week and SPX is unchanged for the week. With just two days to go, this is beginning to look a lot like a typical summer week. In my video over the weekend, I spoke about how July/the summer months tend to see SPX move up just 20-30 points at a time on a weekly net change basis.

Of course a lot can happen over the next 2 days, but it’s really starting to seem that way for now. On Monday it looked like we were going to tag the upper end of the expected move, while this morning it looked like the lower end of the expected move might come into play. Ultimately SPX ended up unchanged for the week as of today’s close.

SPX seems to be caught in this range now between 7525 and 7425. There have been some minor breaches a long the way, but the majority of trade for the last week and a half has been inside of this grey box.

This box will be the key level to watch for as we close out the week.

I also want to do a quick update on the trade of the week from the video over the weekend. The trade of the week was an SPX Diagonal for this coming Friday and the next Monday expiration where we sold the 7500 call for this Friday (July 10 expiration) and bought the 7505 call for Monday (July 13). The trade was costing around 3.45 debit at the time of the recording, but you were able to fill for around 3.20 on Monday morning.

Assuming you placed the trade on Monday morning at the open for around 3.20, the closing price of this trade as of today’s close is around 5.75, meaning a roughly 80% return in just a few days.

So far, this has ended up being a good passive trade to put on and possibly even taking profits from already. We’ll monitor the trade over the next 2 days and see where it closes on Friday, since the max potential is a return of around 900%

As the week winds down, the expectation of the summer vibes is that we push slightly higher – maybe even towards 7500 where we would see the max profit on the trade above.

7500 and 7425 will be the key levels for tomorrow.

Good luck!