$SPX Is Going Nowhere but the Market Is Getting More Volatile
The stock market continues through a choppy season, where overnight moves and gaps have become the new normal. However, the current price action regime can be navigated those gaps in our favor, as we have done for $Tesla Motors(TSLA)$ $Netflix(NFLX)$ $Alphabet(GOOG)$ $Meta Platforms, Inc.(META)$ $Broadcom(AVGO)$, and the $S&P 500(.SPX)$ itself; as gaps typically trigger counter-moves.
Since Monday, the gap at 7,651 has been on our radar for the SPX. Tuesday’s indecision added warning signs, and Wednesday’s retrace, confirmed by the loss of the anticipated daily level at 7,767, triggered a bearish move that followed through during the Wednesday-Thursday overnight session. Today, the price opened with a new gap, filled via a morning bounce, and later consolidated into the afternoon.
The net daily move was zero for the SPX, while the $Cboe Volatility Index(VIX)$ jumped 3.2%. When this happens, it is worth zooming out to view the current market structure from a broader perspective. Look at the chart below, which should be considered by both traders and long-term investors.
With midterm elections potentially brewing a significant move, the chart speaks for itself: it has zero trendlines, it highligs only specific technical events that have historically preceded massive moves over the past few years.
Markets are always moving - and sometimes, the best move is knowing what works for you.
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