Indices are moving toward capitulation or a climax. This could be due to the upcoming NFP report, as employment is the missing piece of the puzzle and may be the final nail in the coffin. We already have declining GDP and deteriorating economic data; if the NFP also disappoints, it will confirm that a recession is inevitable in the near future. I think the market is either fearing this NFP (considering government layoffs and cancellations) or the numbers have already been leaked.

Regardless, what I see in the tape is a gradually increasing persistence of the downtrend, while put/call ratios remain stagnant, showing no signs of fear. This sets the stage for a climax move. We may see amini-capitulation today, but it might not last as NFP looms. Regardless of what happens between now and Friday, it's highly likely that the market will still be near the lows right before the NFP release and could open Friday's RTH session with a massive gap down if the numbers are bad.

In my opinion, the SOX4575.37 is the most important sector to watch, as it led the downside by forming a major top last summer while the SPX5849.72 continued to move higher. I've discussed this before-this is an extremely bearish development, especially considering that SOX has built a massive right shoulder since the top, similar to what ARKK51.66 formed in 2021 before the bear market began. SOX, Daily: The index closed at support yesterday and may open lower today. If so, the short-term projection illustrated on the chart becomes possible.