SPX closed essentially unchanged on the day, but that doesn’t come anywhere close to painting the full picture of the intraday price action today. SPX opened lower on the day and was nearly unchanged for the week early in the session. This is significant because earlier in the week, we were outside of the expected move to the upside.

I brought up the pattern we had been seeing the past few weeks where SPX would take the lower end and then rally, and if this week was a potential opposite scenario. As of right now, I think it is. On Monday it was looking like we might go 2 standard deviations up, and by Thursday morning we were nearly unchanged for the week.

While SPX did rally from the lows today to close flat for the day, I still think overall the price action has been pretty bearish for the past few days. We clearly rejected making new all-time highs and were unable to build on the momentum from late last week and early this week.

The daily chart shows a larger candle than the net change would imply. /ES was was down nearly 60 points overnight, but SPX only gapped down about 40 points. The opening print was the low and most of the day was just back and forth price action other than the huge push higher during the Xi/Trump press conference.

Friday has been a wild card lately, but I think the damage has been done and the bulls failed to do their job. We may not get to the lower end of the expected move, but I certainly don’t think we get to Monday’s high either.

If a meeting with China couldn’t rally SPX, then I am not sure what else will. In reality, I think we might be headed lower or at the very least, any rally tomorrow should likely be sold heading into next week.

I had shared a chart of the 10Y interest rate not too long ago, marking the 5% level as a key level – a switch that if we flipped over it, things could get ugly for SPX. We have now crossed that level and are sitting at nearly 20 year highs.

5.3 is the next important level, the next line in the sand. I think things get really ugly if that one breaks. Keep an eye on this because it will be driving the market if it continues to creep higher.

The house is supposed to win, or so we were always told, but I think the house is on fire right now and no one is home.

It would be a poetic end to the week if SPX ends up unchanged. We’re about 50 points from that level, so 7650 and 7750 will be the levels to watch for tomorrow.

Good luck!