SPX mostly had a pretty quiet and boring day today where we gapped down and stayed down for most of the day, but it wasn’t a large move in particular. For the day SPX closed down 25 points but was as low as 45 at one point in the morning. We rallied close to 20 points into the close.

The market continues to be a mixed bag, where MAG 7 and other big tech names are down but chip stocks are rallying. We’ve seen the opposite also be true. This has been the larger theme of the market this summer. We haven’t seen too much correlation in either direction.

The daily chart did have some follow through from Friday’s candle, which is what we were watching for. The major takeaway, however, is that we did not close at the low of the day and now instead have a candle with a larger wick to the downside.

What we are looking for now is another failed rally attempt, where SPX could attempt to retest the 7710-7725 area. If this area fails and rejects, then we would expect today’s low of 7665 to be taken out.

Because of the tug of war like price action that I described internally, SPX is in a really weird spot where it is stuck in the middle of some sectors rallying while others sell off.

You can see the above data taken from the dashboard once again which really drives the point home. I shared a snapshot sometime last week that painted a similar picture. The majority of SPX is declining but the index refuses to sell off.

We are stuck in a situation where the market is refusing to sell off, but unable to rally as well. The move up we saw towards the end of last week was rejected but the move back down today had very little follow through and was pretty muted.

Normally I am not a big trendline guy, but if we look at the hourly chart for the past couple of weeks, we can see that we have made a lower high, but are unable to make consistent lower lows.

For now we’ll monitor that pattern and if it breaks then perhaps we finally find some momentum and direction.

We’re in a pretty boring market place right now with not a lot of movement or action. Normally dull markets are bullish but given how close we are to the all-time highs and SPX is unable to sustain rallies, I think the best outcome would be a pullback to a level where dip buyers step in. We haven’t reached that point yet.

7725 and 7665 are the key levels for tomorrow.

Good luck!