One Market Battle After Another
S&P 500 Sees First 5% Pullback & Tests Tertiary Support At The 200 Day Moving Average
Hello friends!
I hope this finds you well, getting in some much needed and well-deserved rest and enjoying this weekend. In review, I have only a few thoughts to share this weekend along with some of my favorite notes from the past week in case you missed them! :)
First 5% Pullback Of 2026
It proved to be yet another captivating time in the markets last week.
The entire week was a battle for control. :)
The week began with a large gap lower open on Monday, followed by a +3.15% ripper bounce back from the first hour low. The bounce carried higher until a Tuesday afternoon turnaround in which the sellers mostly took control for the remainder of the week except for Friday’s strong open which was also sold.
The S&P 500 closed -1.60% for the week, -3.59% for the month, and -3.12% for the year-to-date. Yes, it certainly feels like a lot more than these small percentage declines reflect, mostly because there has been deeper, far more corrective price action and rotation.
More importantly, this is the first -5% pullback from the intraday January 28 high at S&P 7002 and our first three-week losing streak since just over a year ago!
Bull Trap Reversal Tests 200 Day
Within this period of multi-month consolidation and corrective rotation, a bull trap head and shoulders reversal play targeting S&P 6548 was put into motion, followed by strong and sustained follow through.
The breakout to new all-time highs this year has failed.
In addition to the reversal target in close reach, additional levels of interest include the 200 day moving average at 6604, the unfilled gap at 6602 from November, as well as the November low at 6521.
This zone is the next major battleground of many more to come!
