SPX Puts In Its Largest Sell Since Jan 27th. More Red Ahead?

Market Recap: SPX Sees Its Deepest Selloff Since January 27th

Since February 9th, the market had been in a consistent "buy dips" mode, with each pullback finding support and rallying. However, today marked a significant shift as SPX experienced its most substantial selloff in nearly a month. Unlike previous dips, this one was not immediately bought up by bulls, raising questions about the market's next move.

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For two weeks, SPX respected key support levels, allowing the bulls to control the trend. I highlighted this on February 7th, stating: "For Monday, bulls will want to hold 6016-20. This would allow ES to work back up to range resistance, starting with 6066-70, then 6093, then onto 6129." This forecast played out perfectly as ES hit 6129. However, today, SPX lost its major support shelf at 6123-6116, leading to a sharp collapse to the 6020s. This break confirmed a shift in momentum, making today’s drop the most significant since January 27th.

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What’s Next for SPX?

While today’s dip was not bought, it was only one red day. Can buyers step in next week? In this issue, I’ll dive into the key setups we saw leading up to today's selloff, including:

• Breakdown Shorts – The rarest setup type, seen yesterday and today, ultimately triggering the flush.

• Back-Test Shorts – The secondary setup type contributing to the breakdown.

• Failed Breakdowns – My core setup type, which played a role in the initial drop.

Finally, I’ll outline an actionable trade plan for Monday based on these key technical setups.

Learn More:

• Market Selloff: What Triggered SPX's Biggest Drop Since January

• Investors Watch Key Support Levels for a Market Rebound

• Economic Data and Fed Comments Fuel Market Uncertainty

• Technical Breakdown: SPX Falls Below Crucial Support

• Macro Trends: Inflation and Fed Policy in Focus

Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice. Please consult a financial advisor before making investment decisions.