Welcome to SeptemBEAR!

The downside confirmation continued today on SPX, as we broke through some key levels to the downside and saw one of the larger down days in a while. SPX was down nearly 75 points mid-afternoon before seeing a little bump into the close.

7665 was broken to the downside today and SPX also broke below the lower end of the weekly expected move. The small rally into the close brought us back inside the 1 standard deviation move, but that barrier has been breached.

The daily chart now has 3 red candles in a row, with each one pointing lowering and showing some acceleration. The candle today is a weird doji, but the gap down and “stayed down” price action speaks for itself.

It’s not too often that we see a breach of the expected move so early in the week, especially to the downside. For now we can assume that the 7620 level will be some sort of magnet for the next few days.

The shorter timeframe chart I shared yesterday now shows SPX breaking out of this pattern. For now the assumption is that this breach holds and SPX continues to see downward pressure. The expected move level should serve as some support, but as I said earlier in the post, it has been breached and it won’t take much to break it again.

The current expectation is that SPX continues to sell off, or at the very least, that every rally is a selling opportunity for now. We would need to flip back over 7715 before re-evaluating that theory.

All eyes shift to AVGO tomorrow as they have earnings after the close. Last time we saw AVGO tank SPX by 230 points and NQ by 1600. Is it going to be the bad guy again and cause another 2 or 3 standard deviation move to the downside? Or will AVGO be the one to save the day and we snap right back up to unchanged or even positive for the week?

Your guess is as good as mine, but I know we are all excited for the outcome. The rest of the week should be fun!

7611 and 7665 are the important key levels for tomorrow.

Good luck!