SPY's Make-or-Break Moment: Will $590 Hold or Collapse? Feb. 26
Technical Analysis (TA) & Price Action
SPY has been in a clear downtrend, forming a falling wedge pattern on the 1-hour chart, which could indicate an upcoming reversal if price action confirms a breakout. The ETF is currently testing a crucial support level at $590, aligning with major options positioning.
Key observations:
* Trend Structure: SPY is in a downtrend, but the falling wedge suggests a possible relief bounce.
* Support & Resistance:
* Major Resistance: $605 (breakout confirmation level).
* Key Support: $590 → If this breaks, expect further downside toward $580.
* Breakout Target: $610 - $615 if momentum shifts.
* MACD Indicator: Slight bullish divergence, signaling early signs of momentum recovery.
* Stoch RSI: Extremely overbought at 96.22, suggesting a pullback before a possible reversal.
Options Flow & GEX Analysis
The GEX (Gamma Exposure) indicator shows extreme negative gamma, with heavy PUT positioning at $590. If this level holds, a short squeeze could drive SPY back to $605-$610. However, a break below would likely trigger a further gamma-driven selloff toward $580.
* IVR (Implied Volatility Rank): 29.7, with IVx avg at 20.2%, signaling moderate volatility.
* Put Side Bias: 121.8% of options flow, showing heavy downside hedging.
* Key GEX Levels:
* PUT Wall & Key Support: $590 → A breakdown could lead to a fast drop to $580.
* CALL Resistance & Upside Target: $605 → Breakout here could send SPY toward $615+.
Trade Plan & Suggestions
📌 Bullish Reversal Setup (Preferred Play)
* Entry: Above $600 with strong volume confirmation.
* Target 1: $605
* Target 2: $610-$615 (Extended breakout target).
* Stop-loss: Below $589
📌 Bearish Breakdown Setup (Hedge Play)
* Entry: Below $589 with increasing sell pressure.
* Target: $585 → $580
* Stop-loss: Above $595
Final Thoughts
SPY is at a critical inflection point, with $590 acting as the battleground. If it holds, expect a short squeeze rally toward $605+. But if it fails, the next leg down could accelerate toward $580. Given the extreme options positioning, expect high volatility and fast moves.
📢 Risk Management: Use defined stop-losses, watch for volume confirmation, and be prepared for sharp price swings.
🔹 Disclaimer: This analysis is for educational purposes only and does not constitute financial advice. Always conduct your own research and manage risk accordingly before trading.
SPY has been in a clear downtrend, forming a falling wedge pattern on the 1-hour chart, which could indicate an upcoming reversal if price action confirms a breakout. The ETF is currently testing a crucial support level at $590, aligning with major options positioning.
Key observations:
* Trend Structure: SPY is in a downtrend, but the falling wedge suggests a possible relief bounce.
* Support & Resistance:
* Major Resistance: $605 (breakout confirmation level).
* Key Support: $590 → If this breaks, expect further downside toward $580.
* Breakout Target: $610 - $615 if momentum shifts.
* MACD Indicator: Slight bullish divergence, signaling early signs of momentum recovery.
* Stoch RSI: Extremely overbought at 96.22, suggesting a pullback before a possible reversal.
Options Flow & GEX Analysis
The GEX (Gamma Exposure) indicator shows extreme negative gamma, with heavy PUT positioning at $590. If this level holds, a short squeeze could drive SPY back to $605-$610. However, a break below would likely trigger a further gamma-driven selloff toward $580.
* IVR (Implied Volatility Rank): 29.7, with IVx avg at 20.2%, signaling moderate volatility.
* Put Side Bias: 121.8% of options flow, showing heavy downside hedging.
* Key GEX Levels:
* PUT Wall & Key Support: $590 → A breakdown could lead to a fast drop to $580.
* CALL Resistance & Upside Target: $605 → Breakout here could send SPY toward $615+.
Trade Plan & Suggestions
📌 Bullish Reversal Setup (Preferred Play)
* Entry: Above $600 with strong volume confirmation.
* Target 1: $605
* Target 2: $610-$615 (Extended breakout target).
* Stop-loss: Below $589
📌 Bearish Breakdown Setup (Hedge Play)
* Entry: Below $589 with increasing sell pressure.
* Target: $585 → $580
* Stop-loss: Above $595
Final Thoughts
SPY is at a critical inflection point, with $590 acting as the battleground. If it holds, expect a short squeeze rally toward $605+. But if it fails, the next leg down could accelerate toward $580. Given the extreme options positioning, expect high volatility and fast moves.
📢 Risk Management: Use defined stop-losses, watch for volume confirmation, and be prepared for sharp price swings.
🔹 Disclaimer: This analysis is for educational purposes only and does not constitute financial advice. Always conduct your own research and manage risk accordingly 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.
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.