SPY is defying its $98 max-pain target, which is a sign of strength. Of course, the big options players don’t need to beat SPY back down to $98 until Friday’s close, but if the market rallies again on Thursday, the chances of them being able to do that diminishes.

Now we know why the rally can’t pick up any volume: pension funds, which manage $3 trillion in assets are shunning stocks. Bloomberg story here.

Back here, I said that the Fibonacci levels in the Box of Miracles should provide support if the market were to move down. And on Monday, the SPX’s intra-day low was 978.51, only 0.21 points away from the 50% level of 978.72 in the Box of Miracles. How’s that for accuracy? Also, on Friday, the SPX was practically glued all day to the 23.6% level from the Box of Miracles.

JungleGirl’s bear flag is making a 100% extension this morning after Friday afternoon’s retracement. SPY has fallen into its August 3rd gap, and briefly traded below it. If that gap doesn’t hold, the next one is the July 30th gap; the bottom of which is at 97.66.

Here’s me criticizing Larry Kudlow for propagandizing the state of the consumer a week ago. Here’s me criticizing Kudlow after he did it again on Thursday. Here is a picture of anybody who listened to Kudlow getting pole-axed (click chart to enlarge):

That’s a 60-minute chart of the XRT retail ETF from last week. It was down 7.25%. The two big red gashes on the chart were due to the poor Retail Sales report on Thursday morning, and the poor Consumer Sentiment report on Friday morning. (Read more at Bloomberg.)

CNBC had retail experts on who could have saved their viewers from being surprised by those reports. But Kudlow shouted them down.

Note to Kudlow: an apology to CNBC viewers is in order.

Kudlow has also been shouting: “find a bank you hate and buy it.” What happens next? The sixth largest bank failure in US history. Colonial Bank was certainly hate-able, but it turns out that buying CNB wasn’t such a good idea after all.