$SPX: A worrying Intraday Turnaround!

While everyone, even the taxi driver, was celebrating NVDA's positive earnings report, the SPX suddenly reversed. After touching the 20-day simple moving average, it dropped sharply with no buyers stepping in. With a 3.5% swing between the intraday high and low, the SPX closed slightly below the horizontal support level at 6,550 and the 100-day moving average.

It's unfortunate that the right shoulder is missing, as it would otherwise form a perfect head and shoulders pattern—though it might be more accurately described as the head of a one-armed head and shoulders. Jokes aside, the technical outlook for the SPX has significantly deteriorated. The market's bullish sentiment has evaporated, making it more challenging to establish a bottom.

If the S&P 500 doesn’t recover and consolidate support around 6,550 by Friday—an extremely important level that also aligns with the 1:1 extension below—we could face an “Air Pocket” of approximately 175 points. Within this Air Pocket area, we have extensions at 1.382, 1.5, and 1.618. The 14-period RSI is approaching oversold conditions, but it's not quite there yet.