It took until the last few minutes of the day, but volatility did peek its head out again and drove a decent sell off into the close on SPX. From a technical standpoint, SPX saw a decent reversal of about 71 points today. The index peeked at 7722 this morning and ultimately closed at the exact low print of the day at 7651.

From a ‘vibes’ standpoint, I’m not really sure how to read the sell off. Is it something serious/sustainable? Did we reject a key level? (we did, more on that later). Was it just end of quarter rebalancing?

There are a lot of unknowns as we turn the page on September/Q3 and head into the final stretch of 2026.

The daily candle is incredibly bearish, especially when you see the consistent stream of 3 noticeable red candles in a row. This entire week has been a push lower and SPX is just sitting above the lower end of the expected move, as it did at the lows yesterday. We also made a new low for the week today, so the pattern of each day this week making a new low for the current leg continues.

The high for today matched that of Monday’s, and then SPX reversed lower. Is that a key level rejection?

That is twice this week that SPX has rejected the gap down area from Monday morning. Right now, the sellers control this area and so far have done a good job at defending it.

We can round up and call this level 7725. This is the level that is likely keeping SPX from going green on the week. If we attempt at testing this level again and finally do break it, we could see a squeeze towards 7750 once more.

Going back to the point about what the sell off today was – as I said, the ‘vibes’ don’t really know how to read this. Maybe the answer is that it was a mix of everything. A little bit of quarterly rebalancing, a little bit of some contracts rolling over, a little bit of a key level rejecting.

The one lingering question that remains: is the move down sustainable?

Normally we would get our answer the next day, but perhaps MU might still that for the time being.

Overall though, I think things look weak. SPX has been unable to sustain any up moves all week and ‘sell the rip’ has paid off more than ‘buy the dip’ this week. It’s been a negative gamma week and sellers are winning the battle, even if just slightly.

7635 and 7700 are once again the first key levels to watch for tomorrow and we have a 0dte expected move of about 60 points.

Good luck!