• The market caught its breath today, with bulls and bears evenly matched and a slight gain. There was some price stalling on above-average volume, reflecting the indecision. My overall thought is that it could have been worse.
• Quarterly expiration skews the book for the next few days. The expiry at 4000 is gigantic. And perhaps that can serve as some glue that holds things together – but I have no predictions for now. 
• There is the Put Wall at 3900 for support, and 3800 is no slouch for open interest and Put support.
• We have seen this playbook before. The Dealers settle on Friday and then pull the protection rug out from under the market by Monday. Then prices slide into the Fed announcement on Wednesday. 
• Even in a bad selloff, we get a pause day like today and resume the slide in the next session.
• When a similar circumstance presented earlier this year, parachutes were in order.
• If quarterly expiration wasn’t a factor, conquering the upside 5-day line that closed at 3989 would trigger a nice rally. One can hope.
• Otherwise, we have to look for support at the September 7th low (3883.50), then the July low (3723.75), and then the June (52-Week) low at 3639. 
• Below those levels, let’s talk later.
• Don’t forget that we are trading below the WEM low (3975), though the price tried to tuck back inside the WEM all day and failed. It appears that Dealers used the occasion to get out of their positions – making the WEM low resistance for most of the day.
• The key 10-year treasury interest rate briefly popped up to a new high but could not sustain it. Let’s see what happens tomorrow.
• There is an old saying – when in doubt, stay out. I cannot make a decent forecast with expiration at hand. But we don’t have an algo buy signal yet, and our aggressive swing traders are short from 4127.50. 
• We use closes and price acceptance over the 5-day line as our buy stop for shorts if the market turns north before we hit our lower targets or a buy signal presents.
• This kind of market confounds even the best of us. It will go up when you think it will go down and vice versa. 
• But the trend is down until proven otherwise, and the trend is your friend.

A.F. Thornton