I’ve mentioned it a couple of times this week, but today’s action from the market and the VIX confirms it a little more firmly - stocks look like they’ve peaked. The day isn’t over yet, but for the first time in seven days we’re on track to make a (1) lower low, (2) lower high, and (3) lower close.

At the same time, the VIX is showing us a higher range, and a higher close (a mirror image of the market).

Like I said, the day isn’t over yet - things could change between now and 4:00 PM EST. Given just how overbought we are though, I have to think we’re gonna’ give some recent gains back.

Ultimately it’s no big deal - even if you’re a bull - as long as the market doesn’t fall so much it cracks investors’ fragile confidence. We only need/want to slide for a couple of days to burn off the overbought pressure, but we need to do so without going overboard. And for me, I think ‘overboard’ is the S&P 500 falling under 1260. That’s roughly where the 20 day line is.

As an alternative landng spot, maybe 1257 is the better level to watch. That would be a 38.2% retracement of this recent rally.

Either are fine to use….I’m just trying to give you rough idea of what you should reasonably tolerate.

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