SPX Attempts Recovery: CPI Test Looms After Historic Decline

Market Summary The S&P 500 attempted to stabilize today following Monday's 160+ point collapse, which marked the first open-to-close red trend day since February 21st and the largest single-day decline since August 5th, 2024. The severity of the sell-off corresponded with the breach of the critical 5720 megaphone pattern support level that had held since November.

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Today's session saw classic Failed Breakdown recovery patterns, with an initial squeeze from 5568 to 5640s, followed by a tariff-news induced flush to 5530s, before a "double dip Failed Breakdown" triggered another rally to 5643-46. Despite these recovery attempts, the broader context remains challenging, with only three green days out of the last fourteen, setting up tomorrow's CPI report as a critical inflection point.

Technical Levels

• Key Megaphone Support: 5720 (broken)

• Recent Lows: 5568, 5530s

• Bounce Highs: 5643-46

Market Dynamics

1. Pattern Analysis

   • Megaphone breakdown

   • Failed Breakdown recoveries

   • "Double dip" pattern

2. Contextual Factors

   • Historic trend day (Monday)

   • Tariff headline impact

   • Pre-CPI positioning

Looking Ahead

• CPI report impact

• Failed Breakdown follow-through

• Megaphone pattern implications

Follow our analysis for CPI reaction scenarios and key technical developments.