Well it seems that SPX rejected the upper end of the expected move and had a little pull back today… just a little.

In all seriousness, this is the largest point drop in SPX history and one of the largest down days we have seen in a very long time.Things got ugly today and perhaps it was a little overdue.

Over the past few weeks, I have repeatedly raised the question in various videos and posts that what would happen if SPX had a 90% down day? Meaning, 90% of the stocks in the index are down?

That happened today and the result was a 334 point down day, with ES being down over 365 points at the session close.

The daily chart is an absolute mess with one of the largest candles ever recorded. SPX is now back to where it was in late July, essentially erasing 3+ months of gains in a single candle.

Is it a crash? It’s hard to say but it certainly felt like one with everything down across the board. There was no real safe place to hide today.

But we all know what happened, the bigger question is what happens next? Generally speaking, the market rebounds after a move like this. There are some exceptions in history like the back to back 300 point drops during Liberation Day, but all of the previous major drops had some news attached to it. Regardless, most drops like this usually recover the next day or very soon after.

The biggest difference for today is that there was no real true black swan or catalyst. Yes, there are rumors of Democrats being hard on AI or perhaps things heating up in Iran again, but none of that is new or unknown.

Was today just one of the biggest unwinds in history?

Honestly there isn’t even much to analyze today, as I said, we all know what happened and what happens next is a mystery. Usually the market bounces back but I have a feeling that even if it does, we will see a retest of today’s lows at some point in the near future.

We are way outside of the expected move so the probability belongs to the mean reversion back up. The smartest play right now is to stay small and ride the momentum. Don’t try to fight the trend, but the first major rip might be a sell though.

We’ll have to see if there is any outside intervention or a tweet to try and save this, but as of right now that doesn’t seem to be the case.

7300 is the important psychological level for tomorrow. If it breaks, things could unwind even faster.

Ride the wave and be safe out there!