Spy Technical Analysis - Jan. 81-Hour Chart Analysis (Trading Perspective):
* Trendline Resistance and Support: The downtrend is intact with visible resistance at key levels such as $594 and $596. The price is hovering close to the critical support at $589.
* Volume and Momentum: Declining volume on bounces indicates weaker buying interest.
MACD shows a bearish crossover, signaling negative momentum. Stochastic RSI shows oversold conditions, suggesting a potential short-term bounce but remains within the downtrend.
* Immediate Levels to Watch:
* Resistance: $594, $596
* Support: $589, $585
* Trading Strategy:
* If SPY breaks above $594, it may test $596.
* A break below $589 can open further downside toward $585.
Gamma Exposure (GEX) Insights (Options Perspective):
* Call Walls: Major call resistance is at $596, acting as a psychological and technical barrier.
* Put Walls: Strong put support lies at $585, signaling hedging activity from market participants.
* Gamma Flip Zone: Neutral zone remains around $589-$590 where market makers might shift their positioning based on the directional bias.
* Market Sentiment: The net GEX indicates bearish sentiment with -72.7%, reflecting dominance of put contracts over calls.
* Options Strategy:
* For a bearish bias, consider puts below $589 with a target near $585.
* For bullish reversals, calls can be played above $594 targeting $596.
Conclusion:
SPY remains in a short-term bearish trend within a broader consolidation. Watch for decisive breaks of $594 or $589 to determine the next directional move. The current GEX data reinforces bearish pressure, but oversold technical indicators suggest caution for shorts near support levels. Maintain a tight stop-loss and adjust strategies based on volume and price action confirmation.