SPY Pre-Market Breakdown – April 9, 2025
Phase 1: 4:00 AM – 5:30 AM – Early Accumulation
The pre-market session began with SPY trading around the 490 level, showing cautious price action in a consolidation pattern. During these early hours, price maintained a relatively tight range between 489 and 491, with minimal directional commitment. Volume remained light during this period, typical of early pre-market hours, but began building steadily as we approached 5:00 AM.
Around 5:00 AM, we observed the first meaningful price movement as SPY began testing higher levels with several green candles pushing toward 494. This early strength coincided with increasing volume, suggesting genuine buying interest rather than just thin market conditions. The price action formed a series of higher lows, establishing a short-term uptrend channel.
What's particularly noteworthy in this phase was the balanced options exposure, with call and put exposure roughly similar , indicating no strong directional bias from options traders yet. This balance suggested market participants were still positioning themselves, waiting for clearer signals before committing to a direction.
Phase 2: 5:30 AM – 7:00 AM – Positioning Builds
The second phase showed increased momentum and clearer directional bias. SPY continued its upward trajectory, breaking through the 494 level and eventually challenging the psychologically important 495 level. Volume began increasing significantly during this period, adding credibility to the price advance.
Around 6:00 AM, we noticed the first significant divergence between call and put activity. Call exposure began increasing relative to put exposure, signaling growing bullish sentiment. The chart is indicating aggressive call buying or put unwinding. This shift in options flow provided an early signal that institutional traders were positioning for higher prices.
Price consolidation occurred between 495-496 with increased volume, suggesting accumulation rather than distribution at these higher levels. The market was digesting gains but showed no signs of significant profit-taking or reversal. The price action formed a pattern of shallow pullbacks followed by renewed buying interest, a behavior often seen when institutions are accumulating positions.
Phase 3: 7:00 AM – 8:45 AM – Execution
The final phase demonstrated the culmination of the positioning seen earlier. Around 7:00 AM, price momentum accelerated with SPY pushing decisively through the 496 level and challenging 497. This breakout was accompanied by a significant increase in volume, confirming the validity of the move.
Options flow data showed an explosion in call activity during this period, with call exposure reaching over 9 million contracts while put exposure remained relatively stable.
Between 7:30 AM and 8:30 AM, we witnessed classic breakout behavior with price establishing itself firmly above previous resistance levels. Any shallow pullbacks were quickly bought, demonstrating strong conviction from buyers. The market is showing some put unwinding alongside continued call buying, suggesting traders were removing downside protection while adding to bullish positions.
The Level II quotes showed a notable imbalance developing with buyers willing to pay up and fewer willing sellers. This order book imbalance further confirmed institutional interest in higher prices.
Final Bias: Bullish
The pre-market session demonstrated a clear bullish bias supported by multiple factors:
Price Structure: A series of higher lows and higher highs throughout the session, breaking through multiple resistance levels with conviction.
Volume Confirmation: Increasing volume on advances and lighter volume on pullbacks, suggesting genuine buying interest and minimal profit-taking.
Options Flow: Progressive increase in call exposure relative to puts, with the final phase showing overwhelming call dominance, indicating institutional positioning for upside.
Order Flow: Aggressive buying on breakouts with minimal selling pressure on pullbacks, suggesting strong hands accumulating positions.
Late Session Stabilization: Price holding gains near session highs with continued buying interest, rather than fading into the regular market open.
Institutions appeared to be positioning for a higher open and potentially continued upside during the regular session. The methodical building of positions throughout the pre-market, rather than a single aggressive spike, suggests this was not merely a reaction to overnight news but rather deliberate positioning ahead of anticipated strength.
Trade Setups with Entry, Stop, Target
Trade 1: Breakout Continuation (High-Conviction)
Entry Zone: 496.50-497.00 on first pullback after market open
Stop-Loss: Below 495.75 (below pre-market consolidation)
Profit Target: 499.50-500.00 (psychological level and round number)
Rationale: Strong pre-market accumulation with increasing call flow suggests continued momentum into regular hours trading.
Trade 2: Dip-Buying Opportunity (Medium-Conviction)
Entry Zone: 494.80-495.20 if market pulls back to test breakout level
Stop-Loss: Below 494.00 (previous resistance becomes support)
Profit Target: 498.00-498.50
Rationale: Pre-market volume and options flow indicate institutions positioned for strength, likely to defend key levels on pullbacks.
Phase 1: 4:00 AM – 5:30 AM – Early Accumulation
The pre-market session began with SPY trading around the 490 level, showing cautious price action in a consolidation pattern. During these early hours, price maintained a relatively tight range between 489 and 491, with minimal directional commitment. Volume remained light during this period, typical of early pre-market hours, but began building steadily as we approached 5:00 AM.
Around 5:00 AM, we observed the first meaningful price movement as SPY began testing higher levels with several green candles pushing toward 494. This early strength coincided with increasing volume, suggesting genuine buying interest rather than just thin market conditions. The price action formed a series of higher lows, establishing a short-term uptrend channel.
What's particularly noteworthy in this phase was the balanced options exposure, with call and put exposure roughly similar , indicating no strong directional bias from options traders yet. This balance suggested market participants were still positioning themselves, waiting for clearer signals before committing to a direction.
Phase 2: 5:30 AM – 7:00 AM – Positioning Builds
The second phase showed increased momentum and clearer directional bias. SPY continued its upward trajectory, breaking through the 494 level and eventually challenging the psychologically important 495 level. Volume began increasing significantly during this period, adding credibility to the price advance.
Around 6:00 AM, we noticed the first significant divergence between call and put activity. Call exposure began increasing relative to put exposure, signaling growing bullish sentiment. The chart is indicating aggressive call buying or put unwinding. This shift in options flow provided an early signal that institutional traders were positioning for higher prices.
Price consolidation occurred between 495-496 with increased volume, suggesting accumulation rather than distribution at these higher levels. The market was digesting gains but showed no signs of significant profit-taking or reversal. The price action formed a pattern of shallow pullbacks followed by renewed buying interest, a behavior often seen when institutions are accumulating positions.
Phase 3: 7:00 AM – 8:45 AM – Execution
The final phase demonstrated the culmination of the positioning seen earlier. Around 7:00 AM, price momentum accelerated with SPY pushing decisively through the 496 level and challenging 497. This breakout was accompanied by a significant increase in volume, confirming the validity of the move.
Options flow data showed an explosion in call activity during this period, with call exposure reaching over 9 million contracts while put exposure remained relatively stable.
Between 7:30 AM and 8:30 AM, we witnessed classic breakout behavior with price establishing itself firmly above previous resistance levels. Any shallow pullbacks were quickly bought, demonstrating strong conviction from buyers. The market is showing some put unwinding alongside continued call buying, suggesting traders were removing downside protection while adding to bullish positions.
The Level II quotes showed a notable imbalance developing with buyers willing to pay up and fewer willing sellers. This order book imbalance further confirmed institutional interest in higher prices.
Final Bias: Bullish
The pre-market session demonstrated a clear bullish bias supported by multiple factors:
Price Structure: A series of higher lows and higher highs throughout the session, breaking through multiple resistance levels with conviction.
Volume Confirmation: Increasing volume on advances and lighter volume on pullbacks, suggesting genuine buying interest and minimal profit-taking.
Options Flow: Progressive increase in call exposure relative to puts, with the final phase showing overwhelming call dominance, indicating institutional positioning for upside.
Order Flow: Aggressive buying on breakouts with minimal selling pressure on pullbacks, suggesting strong hands accumulating positions.
Late Session Stabilization: Price holding gains near session highs with continued buying interest, rather than fading into the regular market open.
Institutions appeared to be positioning for a higher open and potentially continued upside during the regular session. The methodical building of positions throughout the pre-market, rather than a single aggressive spike, suggests this was not merely a reaction to overnight news but rather deliberate positioning ahead of anticipated strength.
Trade Setups with Entry, Stop, Target
Trade 1: Breakout Continuation (High-Conviction)
Entry Zone: 496.50-497.00 on first pullback after market open
Stop-Loss: Below 495.75 (below pre-market consolidation)
Profit Target: 499.50-500.00 (psychological level and round number)
Rationale: Strong pre-market accumulation with increasing call flow suggests continued momentum into regular hours trading.
Trade 2: Dip-Buying Opportunity (Medium-Conviction)
Entry Zone: 494.80-495.20 if market pulls back to test breakout level
Stop-Loss: Below 494.00 (previous resistance becomes support)
Profit Target: 498.00-498.50
Rationale: Pre-market volume and options flow indicate institutions positioned for strength, likely to defend key levels on pullbacks.
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.
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.