The market is at a key decision point once again — and traders everywhere are watching the SPY closely.
Last week, we highlighted the “line in the sand” — the 66% retracement from the recent tariff-driven sell-off. This level served as the key battleground between bulls and bears, and as expected, the SPY managed to close above it.
Since then, momentum carried the index higher — right into the upside target of 672, a level we’ve now tested three separate times. Each attempt to close above that mark has failed, turning 672 into the new defining resistance level.
So, the question on every trader’s mind is simple:
What comes next?
🔍 Reading Between the Lines
The current setup paints a classic picture of indecision.
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On one hand, closing above the retracement level shows underlying strength.
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On the other, repeated rejections at 672 reveal buyer exhaustion — at least in the short term.
This kind of price behavior often precedes a breakout or breakdown. Traders are waiting for confirmation before committing new capital. If the SPY can close decisively above 672, we could see another leg higher.
However, if it fails again and breaks below the retracement line, a deeper pullback could follow as momentum fades.
💡 What Traders Should Watch
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Daily Close Above 672: This would confirm renewed buying strength.
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Support Retest: Watch for a dip back to the retracement zone to see if buyers defend it.
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Volume Confirmation: Strong follow-through volume would signal institutional support.
In the meantime, staying nimble and avoiding emotional decisions is key. Markets love to test conviction — and this is one of those moments where patience pays.
🧭 The Takeaway
The SPY is sending mixed signals, but it’s doing so at a critical technical level.
Until we see a clean breakout above 672, expect continued choppiness and tight trading ranges.
We’ll cover the next move — and what it means for short-term traders — in this week’s Market Minute video.