The S&P 500 closed below 1980 today or the first Fibonacci retracement level described in this week'svideo (see clip).

Does a close below 1980 mean it's game over for the bulls? No, it is not unusual for a rally to retrace to the other Fibonacci levels above (1950, 1919). However, the deterioration in the market's risk reward profile cannot be ignored. Thus, by rule, we reduced risk (again) before Tuesday's close.

Right Back To Where We Started

The market has returned to a conviction-less and trend-less state. On Tuesday, the S&P 500 closed at 1973, which is the exact same closing level as July 1. Said another way, the market has popped up and down numerous times, but made no progress in 5.5 months.

Ready For Anything

With a Fed announcement coming Wednesday, we have to remain open to all outcomes, including a sharp rally into yearend.