Pullbacks vs. Chop

Earlier last week I definitely gave back some profit trying to trade in a choppy market. I tried to trade my pullback strategy, even though the market was just moving sideways. I used to lose tons of money doing this, but luckily I was able to recognize my error faster this time and just sat out. I actually did write some notes on pullback vs chop not too long ago, but I didn’t review them regularly. So I want to share my notes, as well as ways to reinforce things that are newer.

Pullback vs. Chop – What’s the Difference?

Both pullbacks and chop involve price moving back into key levels, but how they behave is completely different:

✔ A true pullback is clean and controlled. Price moves back to retest a key level (like the 10EMA or 20EMA), holds structure, then makes its next move. It respects levels, doesn’t drift through or to them, and has clear intent.

❌ Chop is different. Instead of a smooth retest, it’s messy, sideways, and full of fake-outs in both directions. It often forms a small base, a short consolidation that allows moving averages to catch up. But just because it’s catching up doesn’t mean it’s setting up a real move. The key with chop is waiting for a decisive breakout in either direction. Until then, it’s just noise.

I Already Knew This… So Why Did I Ignore It?

I already uncovered this distinction a while ago. I even wrote it down. But when I was actually in the moment, watching the market inch up while holding puts, I didn’t listen to myself. This wasn’t a lack of knowledge, it was a lack of reinforcement. When I don’t actively integrate a lesson into my daily process, I default to old habits when emotions kick in. And the strongest habits always win.

Why Does This Happen?

• The brain loves shortcuts. Under stress or urgency, it defaults to the most repeated behavior, not the newest lesson.

• New habits need reinforcement. A realization isn’t enough. If it isn’t practiced, reviewed, or actively engaged with, it fades.

• Emotion overrides logic. In the moment, bias creeps in, wanting the market to go a certain way, convincing yourself a setup is there when it isn’t.

Reinforcement Over Recognition: To Win, It Must Be My Default

It’s not enough to know something, you have to reinforce it until it becomes your default. Under stress, you shouldn’t have to think twice about whether you should cut a loss, recognize chop, or step away from a bad trade. It should already be automatic.

That’s how you win.

In trading, I’ve gotten better at cutting losses faster, not because I sit there debating it, but because it’s become my default. I don’t hesitate. And that’s the level I need to reach with recognizing chop vs. pullbacks behavior.

This applies to life too. If you want to stop overcommitting, ignoring your boundaries, or defaulting to an old version of yourself, you have to actively build the new habit of:
✔ Pausing before saying yes
✔ Checking in with what you actually want
✔ Reminding yourself that you don’t have to prove anything to anyone

Winning isn’t about having the most knowledge. It’s about what you do automatically when it matters most. If I want different results, I can’t just stop old habits, I have to actively build the new ones. Because in the end, it’s not about rising to the level of your goals, but falling only to the level of your default, your norm, your standards.

Market Outlook and Stock Analysis

The S&P pulled back over the past few weeks after a multi-month uptrend and is now attempting to stabilize. The index found support just above 5600, where I just added a second rising trendline from the October 2023 low.

Key Levels to Watch

Support Levels:

• 5601 – Most recent support holding 2 weeks strong

• 5504 – Last week’s test and pivot

• 5400 – Level tested during the September 2024 pullback

Resistance Levels:

• 5668 – Current price test and area that rejected the summer 2024 move twice, then held as support in September

• 5773–5864 – Zone from January to early March includes moving averages and breakdown point

• 6010–6118 – Previous highs from February and March 2025, clear this area and we are looking at new highs

🔵 Bullish Scenario:
If SPX continues to hold above 5601 and pushes through 5668, there’s room to move toward the 5773–5864 zone. This area contains the moving averages and the broader breakdown from earlier this month. A sustained move above that could set up a retest of 6010–6118, where price previously topped out.

🔴 Bearish Scenario:
If SPX breaks below 5601, the next support to watch is 5504, which was tested and held last week. A breakdown below that level would shift the current structure and open the door to a potential retest of 5400, last seen during the September 2024 pullback.

⚖ Neutral Scenario:
SPX may continue to consolidate between 5600 and 5700. This would reflect short-term indecision and allow moving averages to catch up. A tighter range could provide clearer structure for a future breakout or breakdown.

AAPL

AAPL bounced last week off key support near 209, at a horizontal level and a rising trendline drawn from early 2023. Buyers stepped in with increased volume, and the price closed right against the 10EMA on the daily chart.

Price has not yet reclaimed the short-term moving averages on the daily chart, but we did close above the 10 and 20 EMA on the 4h chart (not pictured). The 10EMA, 20EMA, and 50SMA are all evenly staggered above, from the sharp nature of the recent decline. The bounce looks constructive, and the last dip AAPL made below it’s 50SMA, did find support and pivoted. AAPL does remain in a broader downtrend channel and faces several layers of overhead resistance. We could see some back-and-forth or chop in this area before a clearer directional move emerges…or buyers could come in strong and change the direction.

Key Levels to Watch

Support Levels:

• 209 – Major support with horizontal level + trendline confluence

• 198 – Previous weekly support zone and possible retest area

• 180 – 200SMA (weekly) and next major support if 198 fails

Resistance Levels:

• 218–220 – Near-term resistance at the 10EMA and horizontal level

• 236 – Weekly downtrend line resistance and breakout level to watch

• 249 – Key breakdown area from March; major horizontal resistance

Potential Scenarios

🔵 Bullish Scenario:
If AAPL reclaims 218–220 with strength, buyers could target a move toward 236. A breakout from the falling channel would open up the path toward 249 and potentially back to 260. I think next week will give us more insight as to if we do move up. Will it be choppy or a sharper beeline up?

🔴 Bearish Scenario:
If price stalls under the 10EMA and rolls over, a break back below 209 could trigger further selling. Watch for downside toward 198, and possibly 180, especially if market conditions weaken.

⚖ Neutral Scenario:
AAPL may just consolidate between 209 and 220, while the price stabilizes and buyers need more time to feel confident about getting back in.

NVDA

NVDA has essentially been going sideways since mid-June of last year. It’s had some strong pops, but overall, it’s been digesting the bigger run it had from January 2024. I see this as a long base forming…and the longer the base, the stronger the potential breakout. It’s like deeper roots being established, if it breaks out with momentum, it could have room to really run.

This past week, NVDA held support around 114–115, at a horizontal level. Buyers stepped in and defended it, and price closed the week just above the 10EMA on the daily chart. That said, it may experience pressure from the over moving averages above.

Key Levels to Watch

Support Levels:

• 114–115 – Current support zone

• 106 – Major weekly support; a breakdown here would shift the structure

• 98–100 – Psychological level and next downside area

Resistance Levels:

• 119–120 – Near-term resistance at the 20EMA on the daily

• 127 – 50SMA and breakdown zone

• 131.50 – February high and lower boundary of the recent range

• 140–153 – Broad top of the long base

Potential Scenarios

🔵 Bullish Scenario:
If NVDA holds above 114 and can reclaim the 20EMA at 119, there’s a path back to 127 and then 131.50. If buyers can break above that upper range, it would confirm a breakout from the long base, and given how long NVDA has been consolidating, it could have meaningful upside.

🔴 Bearish Scenario:
If NVDA loses the 114–115 zone, especially with volume, it opens the door to 106. A break below that would put the stock below both trendline and horizontal support on the weekly.

⚖ Neutral Scenario:
NVDA could stay stuck between 114 and 127, continuing to base while waiting for market clarity. This chop zone still fits the consolidation picture, so patience might be best here until we see buyers commit or sellers take control.