Breakout to New Highs?
A week ago, $SPX hit new all-time highs for two consecutive days. While the breakout wasn’t overwhelmingly strong, it signaled that the market was testing new waters.

⚠️ Market Panic Over DeepSeek AI
On Monday, January 27th, a sudden panic over a Chinese AI platform DeepSeek sent shockwaves through the market. Major averages and AI-related stocks took a beating—even though many unrelated stocks brushed off the news. Given that $SPX carries heavy weightings in AI stocks, the index slipped back into its trading range. This pullback raises the possibility of a false breakout. Of course, if $SPX rockets to new highs soon, we might all forget about this brief dip.

🔍 Technical Highlights

Resistance & Support

Resistance: $SPX now faces resistance at 6100.
Support: The lower end of the trading range lies between 5760 and 5870, where declines have historically halted over the past couple of months.

📊 Market Breadth
Although the market breadth wasn’t exceptionally strong this week—mainly due to Monday’s steep selloff—it surprisingly held up during the AI decline. Now that breadth is turning more positive again, the oscillators continue to display buy signals that emerged in mid-January.

🔥 $VIX Activity
The $VIX spiked during Monday’s AI selloff and then quickly retreated. This movement created another “spike peak” buy signal

💡 Our Current Strategy
At this time, we’re not holding a “core” position in $SPX since it’s still within its trading range. Instead, we’re trading individual signals as they occur. A crucial tip for options traders: remember to roll options that become deeply in-the-money to effectively manage risk.

🤔 In Summary
Market dynamics are in flux, and while short-term volatility can be unsettling, these signals provide valuable insights. We’re keeping our strategy agile—cautiously observing the market and executing trades based on clear technical signals.

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