SPX Reversal Signal

• Read the latest article of the week here

Dear diary,

It’s me, Dan….today was a rough day in the markets for the shiny object chasers and closet indexers and it’s likely to get worse.

All joking aside….let’s get into a quick recap today that’s focused on the SP500 levels because that’s the key to the rest of the broad market.

I keep seeing people talk about $NVDA earnings and tariffs as the reason for selling but who really cares why? I certainly don’t because as I see it the broad market is fueled by a few simple things:

• Indexation and passive ETF flows

• Everyone and their mother chasing Mag 7

• Earnings growth nearly being cut in half in 2025

In the Sunday report I talked about the views objective views on SP500 based around PRICE ACTION - because that is what matters. We tried to get above $6050-$6060 and clear but it was weak. Then we rolled, tried to rally, and failed.

Here we are Thursday and we broke $5880s. When price gets to an area, for me, how it reacts is key. The lack of reaction, which is subjective to many new here, tells you a lot - in short, it’s an auction and if someone wants to bid something they don’t wait; they BID - the bid was weak today on that area, so, we go lower.

I do think this move was due given the fact that Mag 7 earnings growth was expected to slow - that was one of the articles of the week a month ago.

But whether that matters or not is up to you.

I added to some shorts at the open today, took them off then put them back on after it was clear $5940 was not going to hold.

Where do we go from here? I’ll get into that and some of the new short positions in my book inside as well as update my views on this $SPX and targets.