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I watched them rush to buy Monday's weakness. 

Every small pullback getting scooped up within minutes. 

The same reflex that's worked for months. The pattern recognition firing perfectly.

They're not getting their money back.

Last week's algorithmic channel broke. 

The one-sided machine buying that defended every dip disappeared. You're now in a two-sided market where the dip-buying playbook just became a wealth destruction mechanism.

The morning spike you saw wasn't bullish strength…it was retail buying calls while institutions hedged and offloaded risk. 

The MACD didn't even respond. Everyone who bought up there got burned.

This is where the dips doesn't work. 

The windows closing. You got four weeks left to window dress, and the market's going nowhere. 

Not higher. Not much lower. Just grinding sideways in a flag formation while dip buyers bleed capital on every attempt.

Today, I'm taking you through what changed and why the next four weeks require a completely different approach.

Last Week's Channel Versus This Week's Reality

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Last week was an algorithmic channel. All manipulated by computers. No people.

No downticks. Zero. Not one. Not a single downtick during that entire rally phase.

That's what one-sided algorithmic buying looks like. 

Machines defending specific price levels with systematic buy programs. 

You couldn't short it profitably because the computers overwhelmed any selling pressure.

Now we're in what I call a broken algorithmic ascending channel. 

It's a two-sided market. 

You can short this. You can buy this. The algorithms changed their time and tempo once price broke outside the channel.

The slope changed. The systematic buying disappeared.

What Two-Sided Trading Actually Means

Inside an algorithmic channel, you get one direction. All buying. No selling pressure. Just machines executing predetermined programs.

Once the channel breaks, algorithms shift from momentum-based buying to trend-based trading. They're no longer defending every dip. They're no longer rescuing every pullback.

You can actually intraday trade this to your heart's delight now. But position trading longs by buying dips just became financial suicide.

The setup is to go lower. Maybe to 6,600 if you're lucky. The powers that be won't let it go much further because they'll find a way to game the system through year end.

This Morning's Trap

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This morning's action was what we call an algorithmic hijack. It went vertical. Money came in right there.

The thing is, the MACD didn't respond.

If you bought up there, you got burned. You screwed yourself. You blew it. Unless the MACD comes through and pulls through, you absolutely blew it.

That vertical move was retail buying. The selloff after was institutional hedging. They bought calls, jammed it higher, and gave institutions a chance to offload some risk.

The institutions were shorting the S&P and buying stock to hedge their exposure. Retail provided the liquidity for that hedge at exactly the wrong moment.

The Flag Formation Nobody's Positioned For

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We're gonna trade sideways for the rest of the month. That's my expectation.

You're in a vol box right now. A flag formation. This thing will either roll over or pivot back toward 6,900. The idea that we're gonna rally to 7,500is delirious.

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When you connect the higher lows against the higher highs, you already broke the momentum.

Algorithms trade on momentum and trend. When the momentum breaks, they go back to the trend as their default. You've broken momentum. Now they're just trading off a trend.

The market's going higher but the MACD is making tops below tops. Lower highs and lower lows. That's a bearish divergence.

Bearish divergences rarely fail to materialize. What eventually happens is when the MACD breaks underneath on the weekly and the daily, you get that correction the market's been delaying.

Three Support Levels That Define The Range

6,545 - First major support from recent congestion. Hold here and the flag formation stays intact.

6,400-6,500 - Secondary support zone if the first level breaks.

6,232 - Final support if both upper levels fail.

As long as you're above 6,545, you're okay. If it breaks underneath there and the MACD curls under, you ain't got a prayer. You got nothing supporting this going down to 6,200 and underneath.

It'll get dangerous.

The Next Four Weeks

The powers that be will try keeping this above 6,500 through December. Window dressing. Year-end positioning. Fourth-quarter performance reporting.

But they can't push it materially higher. The momentum broke. The bearish divergence keeps building.

A lot of money came in last week. Whether that was hot retail money or institutional money doesn't matter. Today a lot of that money's being siphoned out.

Stop buying dips like you have for months. That channel broke. The algorithms aren't defending anymore. Every rip you get, consider getting short. Every dip you get, consider getting short.

The setup changed. The playbook that worked is now the playbook that destroys accounts.

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