Bulls Getting Exhausted?
On Thursday, the SPY kicked off the trading session with an outside gap to the upside—a technical signal that typically favors an uptrend day. Historically, about 70% of the time when we see this type of gap, buyers manage to keep the momentum going, and the gap remains open.
This time, however, the market didn’t follow the script.
Instead of pressing higher, buyers lost control. Sellers stepped in with enough force to push prices back down, closing the gap entirely and erasing the early gains. The reversal sent the SPY back to Wednesday’s closing level, raising a key question:
Are the bulls running out of steam?
Why It Matters
A failed gap to the upside can signal waning buying pressure, especially if it’s paired with declining volume or broader market hesitation. When buyers can’t maintain control after a strong open, it often points to potential short-term weakness or a pause in the uptrend.
Traders will be watching closely to see if the SPY can reclaim bullish momentum or if this marks the start of a more sustained pullback.
The Market Minute Takeaway
This week’s action is a reminder that no technical setup is foolproof. Even patterns with a high probability of success can fail—especially when market sentiment shifts quickly.
If you’re trading gaps or momentum setups, be sure to:
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Use tight risk controls in volatile environments
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Watch for early signs of reversal on shorter timeframes
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Avoid overcommitting to one-sided trades
The next few sessions will be critical in determining whether this was just a short-term breather or the start of something bigger.
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