I called the bottom at last week's low and warned of an immediate pullback in the middle of this week. Both calls proved surgically accurate.

We are still in a bubble, and it will burst when the time comes. The bounce from last week's midweek low does not mean the bubble is behind us. As I wrote in the 08.05 Desk Note, "The final leg of every bull run comes with brutal whipsaw moves that can wipe out generational wealth overnight." For now, unless we see signs that the next leg lower has begun, the path of least resistance remains to the upside.

Technical

SPX and ES are trading inside tightening wedges that could resolve as early as next week. A sustained break above the upper boundaries would put a fast thrust toward 8K in play. On the downside, 7.58K is first support on SPX, while 7.63K is first support on ES.

NDX and NQ have rebounded into the descending trendlines from their June highs. A sustained break above the trendlines would reopen the upside. Another rejection would keep 28.6K in play on NDX. NQ shares a similar structure.