•   The S&P 500 has been in a strong "buy the dip" regime since November 21st, with institutions consistently stepping in.

•   We've seen classic "failed breakdown" patterns, where price briefly drops below key support and then rapidly reverses, signaling institutional buying.

•   Currently, the market is consolidating within a wide "megaphone" pattern, which could lead to significant price movement.

•   Understanding how institutions accumulate is key to spotting these opportunities.

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•   "Failed Breakdown" Success: A swift 90-point plunge on Wednesday was followed by a recovery of the regular session low, triggering a 100-point rally by Thursday's close.

•   Another Dip, Another Setup: Friday saw another dip, from 6929 to 6805, which on a failed breakdown of the prior day's low presented another actionable entry.

•   Megaphone Pattern Forming: The last two weeks have seen widening consolidation, creating a megaphone formation that suggests a potentially explosive move is on the horizon.

We are currently in a "buy the dip" regime, nested within a broader macro bull market. The recent behavior has been characterized by sharp, rapid declines ("elevator down") that are consistently met with aggressive buying, specifically through "failed breakdown" patterns. This indicates strong institutional interest in accumulating shares at lower prices.

•   Failed Breakdown: This is the core setup. Institutions wait for a sharp sell-off, a price undercut of a significant low, and then step in to buy, pushing price back above the prior low and leading to a rapid vertical rip. We saw this successfully play out multiple times this week, most notably after Wednesday's 90-point plunge.

The S&P 500 has been trading within a wide, expanding range for the past two weeks, forming what is essentially a large megaphone pattern. This consolidation is significant because it typically precedes a period of increased volatility and a directional breakout. We need to watch for a decisive break of this pattern, either to the upside or downside, with specific attention to the highs and lows of this range.

The current market environment is ripe for a breakout. Given the bullish December seasonals and the consistent institutional buying seen in failed breakdowns, the bias remains to the upside. We should look for continuation of the "buy the dip" theme, with any further consolidation or minor pullbacks presenting potential entry points if they form another failed breakdown setup. A decisive break above the upper range of the megaphone could signal the start of a significant upward move. Conversely, a strong breakdown below the lower range would warrant caution and a shift in perspective.

•   SPX Charts and Analysis - Fri, 12 Dec 2025

•   Understanding Market Consolidation - Tue, 09 Dec 2025

•   Institutional Buying Signals - Fri, 12 Dec 2025

•   December Seasonals in the Stock Market - Mon, 08 Dec 2025

•   The Psychology of Megaphone Patterns - Fri, 12 Dec 2025

Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before making investment decisions.