SPX came just a few points shy of 7800 today and nearly hit the 500 points in 5 days mark. It was last Wednesday that we saw the low of 7313. It has been quite the journey since then.

While today was a technically a red day, it certainly didn’t feel like it. SPX did “reject” the 7800 level but I use that term very loosely. SPX closed 70 points from the high, nearly at the lows of the day. Normally, a 70 point reversal from the highs would be considered significant. But honestly, if you were watching the market today, it certainly didn’t feel like a 70 point swing.

I’m not too sure what to make of the daily chart either. We made a new high today but then closed lower on the day. Some would consider it to be a bearish candle, but we would need some significant follow through tomorrow if that is the case. As of right now, I just don’t see that happening.

The daily chart doesn’t scream reversal to me. Today felt more like a breather, perhaps a quick pause on the rally.

Here is a zoomed in view of this entire rally so far. I have highlighted the majority of today’s price action with a grey box. It’s tiny so it might be hard to see. SPX spent almost the entire day inside of a very narrow 10 point range. The majority of the reversal happened this morning and then SPX spent over 4 hours sitting in a 10 point range.

This is the biggest reason why I feel like today was just a breather and not a reversal. After a nearly 500 point move, the best today did was a 10 point range for 4 hours. The market is exhausted and I don’t think a big down move was going to be the next move after what we just saw.

It’s quite likely that the rest of the week looks like today, where SPX sort of just drifts lower or fades to a point where dip buyers step in again.

The market has surprised everyone lately, so who really knows. Your guess is as good as mine, but my take away from the price action today is that the market needs a breather.

AMD didn’t carry the market like last time and SNDK so far seems like a non event. Major earnings are over for a few weeks until NVDA at the end of the month. Until then, I think it might just be a quiet ride.

Good luck!