The S&P 500 started the second week of 2023 off well enough, adding more than 1% and extending Friday’s employment-fueled gains. Unfortunately, those midday gains proved fleeting, and the index retreated to breakeven by the close. 
Over the last few weeks, we could have written off this impotent price action because institutional money was on vacation. This was nothing more than over-active retail traders running amok. But by now, most institutional money managers are back in the office, which means this price action counts.
And Monday’s failed breakout doesn’t look good. Stocks rallied to start the week, and rather than embrace the strength, big money turned its back and let prices fall. While one day can’t kill a market by itself, it can put a serious dent in any rebound attempt. Fall much lower, and all of Friday’s gains are vulnerable.
The market is at a critical tipping point, and how it responds today will tell us a lot about the market’s mood going forward. Retreat to 3,800 over the next few sessions, and 3,600 becomes the next most obvious target. But on the other hand, if buyers return Tuesday, Monday’s indigestion is forgotten, 4k could be up next. Plan your next trade accordingly.