SPY Crashed Today: Where Will It Head Tomorrow? (Dec. 19)
The market witnessed a steep decline today, with SPY reflecting significant selling pressure. This crash-driven move indicates a pivotal shift in market sentiment, raising questions about support levels and potential recovery zones.
Market Structure Analysis
* Trend Overview: The daily chart shows SPY breaking below its ascending channel, signaling a potential trend reversal or deep correction.
* Volume: An extraordinary spike in sell-side volume highlights panic selling and a possible capitulation phase.
* Sentiment: Sentiment appears bearish in the short term, driven by macroeconomic fears.
Supply and Demand Zones
* Demand Zone: $577–$580 (critical for any potential bounce).
* Supply Zone: $602–$607 (will act as immediate resistance on recovery attempts).
Order Blocks and Support/Resistance
* Key Resistance:
* $591: A psychological and structural level.
* $602: High volume node and previous breakdown level.
* Key Support:
* $580: Near-term support; failure to hold could test $572.
* $567: A crucial lower-level support.
Key Indicators
* EMA:
* 9 EMA and 21 EMA crossed bearish, confirming short-term downtrend momentum.
* MACD:
* Deep in bearish territory, momentum remains strongly negative.
* RSI:
* Oversold on multiple timeframes, signaling potential for a technical bounce.
Options Flow and GEX
* Put Wall: Significant at $590 and $580 levels, suggesting bearish bias remains strong.
* Call Wall: $604–$607, indicating heavy resistance if price retraces upward.
* Gamma Exposure (GEX): Negative, reinforcing current bearish momentum.
Scalping vs. Swing Outlook
* Scalping:
* Look for intraday bounces from $580 to $586 with tight stop-loss below $578.
* Swing Trading:
* Wait for confirmation of bottoming signals near $577 before entering long. Bearish positions remain valid below $590.
Actionable Suggestions
1. Short-Term Bullish:
* Entry: Near $580 support.
* Exit: Around $586–$588 resistance.
* Stop-Loss: Below $578.
2. Short-Term Bearish:
* Entry: On rejection at $590.
* Exit: Target $580 or lower.
* Stop-Loss: Above $592.
Conclusion
SPY's break of key support levels indicates a bearish short-term outlook. However, oversold conditions suggest a technical bounce could occur in the $577–$580 range. Monitor key levels and macro catalysts closely before positioning.
Disclaimer
This analysis is for educational purposes only and does not constitute financial advice. Always do your own research and manage your risk responsibly before trading.
Market Structure Analysis
* Trend Overview: The daily chart shows SPY breaking below its ascending channel, signaling a potential trend reversal or deep correction.
* Volume: An extraordinary spike in sell-side volume highlights panic selling and a possible capitulation phase.
* Sentiment: Sentiment appears bearish in the short term, driven by macroeconomic fears.
Supply and Demand Zones
* Demand Zone: $577–$580 (critical for any potential bounce).
* Supply Zone: $602–$607 (will act as immediate resistance on recovery attempts).
Order Blocks and Support/Resistance
* Key Resistance:
* $591: A psychological and structural level.
* $602: High volume node and previous breakdown level.
* Key Support:
* $580: Near-term support; failure to hold could test $572.
* $567: A crucial lower-level support.
Key Indicators
* EMA:
* 9 EMA and 21 EMA crossed bearish, confirming short-term downtrend momentum.
* MACD:
* Deep in bearish territory, momentum remains strongly negative.
* RSI:
* Oversold on multiple timeframes, signaling potential for a technical bounce.
Options Flow and GEX
* Put Wall: Significant at $590 and $580 levels, suggesting bearish bias remains strong.
* Call Wall: $604–$607, indicating heavy resistance if price retraces upward.
* Gamma Exposure (GEX): Negative, reinforcing current bearish momentum.
Scalping vs. Swing Outlook
* Scalping:
* Look for intraday bounces from $580 to $586 with tight stop-loss below $578.
* Swing Trading:
* Wait for confirmation of bottoming signals near $577 before entering long. Bearish positions remain valid below $590.
Actionable Suggestions
1. Short-Term Bullish:
* Entry: Near $580 support.
* Exit: Around $586–$588 resistance.
* Stop-Loss: Below $578.
2. Short-Term Bearish:
* Entry: On rejection at $590.
* Exit: Target $580 or lower.
* Stop-Loss: Above $592.
Conclusion
SPY's break of key support levels indicates a bearish short-term outlook. However, oversold conditions suggest a technical bounce could occur in the $577–$580 range. Monitor key levels and macro catalysts closely before positioning.
Disclaimer
This analysis is for educational purposes only and does not constitute financial advice. Always do your own research and manage your risk responsibly before trading.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.