🏆 Today's Chart of the Day was shared by @SubuTrade.
- The S&P 500 opened higher by +1.4% today as $NVDA initially jumped following last night’s earnings report. However, it violently reversed, finishing down more than -3.2% for its worst day since last Thursday.
- According to @SubuTrade, bearish reversals of this magnitude are extremely rare, with just two prior examples since 1957, both occurring this decade in April 2020 and April 2025.
- Forward returns were positive across the board in both cases, but drawing firm conclusions is tough with only two data points. Context matters, and both cases occurred shortly after sharp, bear-market-sized drawdowns. This time, $SPX is only -5.1% off record highs.
The Takeaway: The S&P 500 logged one of the sharpest bearish reversals in its history today, gapping higher by +1.4% before closing lower by -3.1%. While forward returns were bullish in the two prior cases, the market backdrop was very different from the “max pain” we’ve seen so far this time around.
