Hello hello! Today will be a shorty but goody with a focus on SPX along with some thoughts on managing positions in this kind of market. We just closed out another week of new highs, though we’ve still had had a bit of mixed tape underneath the surface (stocks moving in different directions, a lack of synchronicity). I’m looking forward to what this week brings.

SPX Review and Outlook

Previous Week
High: 6,481.34
Low: 6,364.06
Close: 6,449.79

On the weekly, the structure is still firmly bullish. There was a digestion period in June and the pullback at the end of July, but the index continues to climb. There isn’t clear evidence yet of exhaustion, though the upper and lower wicks do show levels where buyers (6,364.06) and sellers (6,481.34) stepped in, signaling some indecision as in: can we go higher or do we want to breakdown first?

The daily chart does show that the index closed under a short-term uptrend line on Friday, which could either mark a new touchpoint or a potential crack if sellers press lower.

Potential Scenarios

• Shallow reset at the 10 EMA (6407): A dip to the 10 would be a normal reset. If price holds here, it may be just a tap and go, grinding higher back to the ATH. From there, we’d reassess price action.

• Pullback toward the 20 EMA (6362): A break of the 10 would open the door for a test of the 20 or the uptrend line. This would still be a standard pullback within the broader trend, but I’d start to wonder here if we were rolling over.

• Deeper move to the June–August uptrend line or 50 SMA (6228): If sellers push further, we’d be looking at these two areas. Even here, the decline would be less than 4% from the highs, which fits as a healthy pullback inside a bull market.

• Range-bound near highs: Another possibility is that SPX oscillates in a wide range between the new ATH and the EMAs, or a tighter range around the ATH, holding near record levels without decisive direction. This kind of chop could be consolidation for either a new leg higher or a larger pullback.

The last thing I’ve noticed is this little potential shelf (6446) that the last 3 days of price action created:

So for those leaning bullish this coming week, this could be a tiny springboard for an immediate move higher.

What matters most now is letting price show its hand at each level, instead of trying to guess ahead. Whether it’s a retest to a key level or moving average, a sideways digestion, or a further climb higher, it’s all part of the process of a bull market working through its moves.

Using the Market as Context for Managing Positions

I analyze what the S&P and other indices, like the Dow and Nasdaq, are doing as part of my top-down analysis. Seeing what the sum of the whole is doing, against what individual stocks are doing, gives me another piece of the puzzle. It’s extra context for how I manage my trades.

Right now, underneath the index, not everything is moving in sync. Some names are breaking down, others are hitting new highs, and plenty are just drifting. In a strong trending market, you can get away with being early or taking a lesser setup, because momentum carries things higher. In a mixed market, you don’t have that luxury. You have to wait for confirmation and use tighter entries if you want the odds on your side.

For me the index is like a weather report. Sometimes the forecast (index) shows clear sunny skies, but the weather varies in each neighborhood (stocks). The sun may be poking out in one area, while another is experiencing a downpour, much like our rainy season here in NC. Managing your positions is about maintaining awareness of the broader context, but ultimately acting only on what your stock and its trading chart is telling you. (ie, don’t leave that umbrella behind!)

And in this kind of market, restraint plays a bigger role. Be quicker to protect profits and tighter on stops. If a trade is working, scale some out or raise your stop so you don’t give it all back if the stock changes direction. If a setup is still developing, just wait, don’t get in early.

The practical takeaway:

• Focus on your best setups only. No B-grade trades.

• Wait for confirmation before entering, don’t guess early.

• Use tighter entries from smaller timeframes to control risk.

• Manage each trade stock by stock. The index gives context, but the chart in front of you is the piece that matters most.

That’s where I’ll leave you for this week. The market will do what it does, and our job is simply to meet it with clarity and patience. If you stay focused on your best setups and keep managing one decision at a time, you don’t need to solve everything at once. Progress comes from maintaining objectivity and stacking those steady choices.

Til next time!