Continuing the pattern we have seen for the past few weeks, SPX moved nearly roughly 66% of the expected move today. The trend lately has been that early in the week we hit the expected move and then reverse. This has been true for both up moves and down moves for several weeks. The question for the rest of the week is that will this trend continue/repeat or is this finally the one that breaks?

At the high today, SPX came just about 22 points from a new all-time high. NDX did end up hitting a new all-time high again, so it continues to outperform. If the pattern continues, then SPX should actually hit a new all-time high tomorrow while tagging the upper end of the expected move. If you are a pattern trader, then that would be a possible short entry.

The daily chart continues the momentum from Thursday’s low, flying to the upside and invalidating all of the down move from last week. If you look at the most recent lows from 9/16 and 10/1, and argument can be made that both are higher lows and that SPX is in a strong up trend. Shattering the expected move in the coming days would confirm that, but it is conflicting with the pattern of reversing from the expected move levels. We’ll see which side wins.

The probability trader in me says to short the rip, but this market has shown incredible resilience to everything going on. Rising interest rates don’t matter. Elevated oil prices don’t matter. Rising inflation and unemployment don’t seem to matter, either.

The AI trade and big tech continue to carry SPX to new highs.

90% of all trade in the past 2 months has occurred inside of this grey box. We are at the upper end of it.

A lot of conflicting viewpoints right now which only leads me to believe the market will find a way to fool everyone who dares stand in the way.

A quick note that VIX also closed up today, which is the pattern we have been waiting for – SPX and VIX rising together, especially as SPX makes new highs. The set up is there and if you are a bear, then patience is the best trade you can make right now.

If today was any indication, then this should be a fun week! Let the volatility continue!

Good luck!