The SPY market outlook shifted dramatically after the market hit its third downside target, which many traders were closely watching as a potential turning point.
At the same time, a slight bullish divergence began forming in key momentum indicators — a signal that selling pressure could be fading.
That combination ultimately marked the pivot.
Soon after, the market surged sharply higher.
SPY Breaks Above the 200-Day Moving Average
Following news of a two-week ceasefire agreement, stocks rallied aggressively, pushing the S&P 500 (SPY) back above its widely watched 200-day moving average.
For many institutional traders, the 200-day moving average represents an important line between long-term bullish and bearish trends. Reclaiming that level often improves overall market sentiment and can attract additional buying from systematic trading strategies.
However, the speed of this rally created something traders are watching closely.
A Large Gap Remains Below the Market
The sharp move higher left a large price gap below the market.
In technical analysis, gaps often act like magnets for price. Markets frequently revisit these areas before continuing higher, especially after a rapid rally driven by news.
That raises the key question traders are now asking:
Will the market fill that gap before attempting new all-time highs?
What Traders Are Watching Now
Several factors will likely determine the market’s next move:
- Whether SPY holds above the 200-day moving average
- If buyers continue stepping in on short-term pullbacks
- Whether the gap below the market attracts sellers
If bullish momentum continues, the market could attempt a run toward new all-time highs.
But if the gap begins to pull prices lower, we could see a temporary retracement before the next major move.
Watch the Full Market Analysis
In this week’s FFR Trading Market Minute, we break down the charts, technical levels, and key signals traders should be watching now.
👉 Watch the full analysis to see whether the SPY is likely to fill the gap — or push toward new highs.