Stocks slid intraday, filling the gap created by Monday’s rally, as outlined earlier this week. I don’t have a strong conviction about what happens tomorrow — the index could realistically move in either direction. However, it does appear that the S&P 500 is now forming a potential double-top pattern, with the neckline around 6,550.

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If we are putting in some kind of topping pattern, where a steeper decline may be setting up, it’s not unusual to see this type of churning action near the highs. In fact, we observed similar behavior in 2021 and early 2022, as well as in January and February 2025, both of which were accompanied by bearish divergence on the RSI. So, it doesn’t look all that dissimilar.

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If we’re to believe the 1966 analog, the same thing happened back then, too, with a similar topping pattern and formation. So, technically, one could argue that from the market’s current position, there’s a good opportunity for a larger pullback to develop.

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Tomorrow marks another $23 billion Treasury settlement date, with an additional $26 billion set to settle next Tuesday. The point is that this process is going to continue for a while. When we have Treasury settlement dates, we tend to see usage at the Standing Repo Facility increase — $3 billion was used at the SRF on Tuesday’s settlement date.

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Funding rates didn’t see much relief today, and they probably won’t see any tomorrow either. I would expect them to trade higher.

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Liquidity is tight and will likely remain that way as long as the Treasury continues issuing debt and the Fed keeps contracting its balance sheet. Still, as long as conditions remain manageable and the SRF is being used, I don’t see a reason for the Fed to end QT in October — though I could see it wrapping up by December.

Tesla (TSLA)

Tesla reported results today. I don’t follow the company as closely as I used to when I owned it from 2014 until early 2022, but earnings were weak while revenue was strong, suggesting a margin problem somewhere in those numbers. In any case, the options positioning was so bullish that it’s actually bearish. The key level to watch is $420 — if Tesla breaks below that, it could face a significant drop. My guess is the market is waiting for the conference call to conclude before making up its mind.

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Netflix (NFLX) broke below its descending triangle pattern, and if you project the roughly $200 drop from the peak by another $200 from the point of the breakdown, that would put the stock in the low $900s.

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