Indicators Tell the Story
We’re now at TD 7 of 13 in SPX, and the trend remains firmly bearish. Despite back-to-back small gains following Friday’s 1.97% selloff, the market is still clearly trending lower. Momentum has not shifted — this is classic bear market behavior: sharp selloffs punctuated by quick, shallow relief rallies. The tape may look better, but under the surface, the indicators are not buying it.
- SPX remains below its 200-day MA (5761), with each bounce failing to reclaim critical resistance levels. The structure points toward a re-test of 5479/5465, with an eventual move to 5175 still on the radar.
- QQQs rejected 495, a key failure. Without confirmation from the Nasdaq, this rally remains on borrowed time.
- Breadth remains negative: despite green opens, we continue to see more decliners than advancers on a trend basis.
- Stochastic and MACD signals have rolled over, reinforcing the short- and intermediate-term downside bias.
Short-Term Tactics: Scalp Trades Only
While the larger trend is lower, short-term scalping opportunities do exist. These brief rallies — often sparked by oversold conditions, short covering, or lackluster data — are chances to fade into strength, not chase.
- Traders can look to sell rallies into known resistance levels (5565 on SPX or 475 on QQQs).
- Any bounce that lacks volume and breadth confirmation is suspect.
- Until we see a positive divergence or a break of the downside momentum cycle, selling strength and avoiding breakdowns remains the playbook.
Bottom line: This is not a reversal-it’s bearish consolidation inside a broader downtrend. Stay tactical, don’t confuse a bounce with safety.
