After last week’s sharp selloff on Thursday, the market finally delivered the setup we were watching closely: a potential bullish divergence forming on SPY. And right on cue, that divergence materialized.
The result?
A powerful rebound that sent the market surging higher in a matter of hours.
But the bigger question now is this:
Was this the start of a true trend reversal — or just a holiday-week bounce?
A Rebound With Limits
While the market’s rally was impressive, it came with a key limitation:
👉 SPY has not yet broken above the prior swing high.
Despite the strength of the move, the index has stalled just below a critical level. For traders, this hesitation matters. A failure to push into new daily highs can often signal:
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Weak follow-through
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Short-covering rather than real buying
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A potential lower high forming
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A setup for another leg down
In other words, the bullish divergence worked — but the bigger trend still has something to prove.
Holiday Rallies Can Be Deceptive
With Thanksgiving behind us and December approaching, the market is entering a period where low volume, seasonal optimism, and light institutional participation can create misleading price action.
Historically, markets can float higher this time of year…
but just as often, they can produce false breakouts that trap traders chasing strength.
That’s why this week’s Market Minute breaks down:
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The exact levels SPY must clear to confirm the next leg up
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The signals that would suggest the selling is not finished
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Why this rally may be more technical than fundamental
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How traders should position themselves heading into December
Bottom Line
The market exploded higher — and the bullish divergence played out exactly as expected.
But until SPY breaks above its prior daily swing high, the question remains:
Is the selling truly done, or is this just a holiday rally masking deeper weakness?
You’ll find the full analysis, charts, and key levels in this week’s Market Minute.