After last week’s expected pullback to the daily 20-period moving average, the SPY has once again regained its footing and is threatening new all-time highs. On the surface, the trend remains intact. However, beneath that strength, several factors suggest traders may want to remain cautious in the near term.
From a technical perspective, price has rebounded as anticipated, confirming short-term support. That said, potential monthly divergence is beginning to form — a signal that often warrants closer attention when markets are extended near highs. While divergence alone doesn’t guarantee a reversal, it does raise the odds of increased volatility or consolidation ahead.
Adding to the uncertainty is a looming Supreme Court ruling on tariffs, which could have broad implications across multiple sectors. Markets are forward-looking, and even the anticipation of a major policy decision can influence positioning, sentiment, and short-term price action.
For traders, this environment reinforces the importance of discipline. Chasing breakouts without confirmation can be risky, especially when macro headlines and higher-timeframe signals are in play. Instead, focusing on defined levels, risk management, and selective setups may be the smarter approach until more clarity emerges.
We break down these dynamics — and what they could mean for the broader market — in this week’s Market Minute.
Stay alert. Stay disciplined. And trade what’s in front of you.