There are a few things I’m watching closely as we move into September, and the first is seasonality. Historically, this stretch of the year can bring a little more volatility and some choppier price action. That doesn’t automatically mean bearish, it simply means the market has a tendency to test both sides of the range before deciding where it wants to go next.
And right now, $SPX is giving us an interesting setup.
Once price cleared that prior gap fill on the daily chart, the bulls wasted no time. SPX pushed aggressively higher and drove straight back to the 1.618 Fibonacci extension at 7,745 in just two trading sessions. That kind of momentum is always impressive.
We’re now sitting right around that 1.618 level, while also approaching the top of the descending channel that has been developing. That puts us at an important decision point.
Pullback or breakout?
The RSI adds another interesting piece to the puzzle. It has recovered back above 50 and is pushing toward the 60 area. That’s constructive momentum, but it isn’t yet at an extreme overbought reading. In other words, there is still room for bulls to push if the price action confirms it.
The bigger picture is also worth respecting: SPX is trading near all-time highs, and markets that are making or approaching record highs can remain stronger than expected for longer than bears anticipate.
For me, the key is confirmation.
If SPX can break above the channel and hold, the 1.618 extension could become support rather than resistance, opening the door for another leg higher.
But if price rejects here and slips back into the channel, I’d be watching the 7,620–7,600 area as an important test.
So for now, I’m not trying to predict the answer.
I’m watching the reaction.
At these levels, let price tell us whether this is simply a pullback in the making or the beginning of another breakout.