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If you’ve been trading long enough, you start to notice patterns that show up again and again.
Often the market will push higher for two or three days, then deliver one sharp pullback before the next move higher begins. It’s not a perfect rule, but the rhythm appears frequently enough that I pay attention to it.
Heading into the end of last week, we had already seen a couple of strong up days, which made the timing of the pullback particularly interesting. The question now is whether the sell-off we saw late last week was simply that typical down day the pattern tends to produce.
If that’s the case, the market could be setting up for another push higher as the new week begins. I’m not trying to call an exact bottom or predict a massive squeeze.
I’m simply respecting the way this market has been moving and how often it repeats the same rhythm.
What Knocked the Market Lower
Part of the weakness came from headlines. A comment suggesting inflation could remain elevated and that interest rate cuts may not arrive as quickly as investors hoped quickly rattled sentiment. The market reacted almost immediately.
Early in the session, during the first 30 minutes, stocks actually caught a bid and looked ready to push higher. For a moment, it seemed like the market might stabilize and continue the recent upward momentum. But after 10 a.m., the tone shifted quickly.
I was watching the key levels closely and knew that if the market broke the low from the opening range, the downside could accelerate. Once that level gave way, selling pressure increased rapidly and the market slid lower through the rest of the session.
It wasn’t pretty, but it also fit the broader pattern that has been guiding this market for several weeks.
What I’m Watching This Week
Despite the drop, the move may actually be creating a potential buying opportunity. That’s often what happens after a sharp flush lower — weaker hands get shaken out, and the setup becomes clearer once the panic fades.
The S&P 500 (SPX) was sitting near 6,819 when I last checked late last week. That’s certainly below the earlier highs, but it’s far from a complete breakdown.
If the market can stabilize and begin to recover as the week unfolds, we could see the next leg of the pattern begin.
I’m not suggesting anyone load up aggressively. The smarter approach is to respect the pattern, manage position size carefully and watch how price behaves as the week develops.
That kind of discipline is what keeps traders in the game when markets are volatile and headlines are driving the action.
The market doesn’t owe us a bounce. But it often rhymes — and right now the rhythm suggests we may be setting up for one.
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Geof Smith
Geof Smith Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Why the Price of Silver Could Rise Steeply
The pressure is on Fed Chair nominee Kevin Warsh to drastically lower interest rates.
Historically, this directly impacts silver prices and I doubt this time would be an exception.
I already have plans in place to play this move while it happens…
Disclaimer: We develop tools and strategies to the best of our ability, but no one can guarantee the future. There is always a risk of loss when trading past performance is not indicative of future results. Since LIVE trading began on 9/18/25, there have been 18 trades, with 15 winners and three still open, continuing the undefeated streak. In LIVE trading, the average return has been 32.05% and the average hold time has been 16 days.
