"Trump Tariff Tweet" low bent but not break

The S&P 500 (SPX) and other U.S. equity indices have had plenty of volatility in the wake of Nvidia's (NVDA) earnings print last week. Thursday's intra-day rally on the SPX stalled at a logical chart resistance defined by the weakening 13-, 26-, and 40-day moving averages (DMAs) now in the 6705 to 6754 range prior to forming a bearish engulfing candle and closing below the "Trump Tariff Tweet" low near 6550. However, Friday's rebound off an intra-day low of 6521 reclaimed 6550. This means that the key 6550 support bent but did not break.

The SPX has rebounded off another tactical bullish signal from the 3-month VIX relative to the VIX as of Friday's close (Chart 2), but we view the tactical technicals as challenging with the risk of a September into November/December head and shoulders top while below the weakening DMAs and potential shoulder peaks in the 6700s (6705 to 6775 range). The last positive signal for the 3-month VIX relative to the VIX (see last week's blog post) did not trigger a meaningful upward move in the SPX

In summary, the SPX has a choppy to toppy pattern with support near 6550-6521 and resistance in the 6700s.

Chart 1: S&P 500: Daily candlestick chart

Chart 2: S&P 500 (top) and the 3-month VIX vs. the VIX