SPY Support Levels and Potential Reversal Zones

about 1 month ago

"Now, here's what's important about that. The longer that we create transactions at this level, if next week, if the market wants to go higher on lower volume, we can easily break away and treat this as support. Now, the downside is if we create a bunch of transactions as it slowly moves sideways right above 681 and right beneath 684, 685, then you're creating a wall of resistance above. So that if we do make that break next week, it'll be hard to recapture; Wall Street will begin to sell and not spend much time looking in the rearview mirror at the bag holders that got left behind buying at a frothy top market. If we do come down and we don't bounce hard on 670, you can pretty much book that we're going to run down and hit 650."

The speaker outlines critical support and resistance levels on the SPY chart. He highlights that if transactions continue to form around 681, they could establish support, but a buildup of resistance may prevent a sustained upward move. A drop below 670 that fails to bounce could lead to a move towards 650. The commentary advises caution and emphasizes the importance of stop-loss planning.

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