The market took a hit last week after clear warning signs appeared in the charts.
Last Thursday, we pointed out a bearish divergence in both the daily and weekly SPY setups — and by Friday, the S&P 500 ETF tanked more than 20 points.
Since then, prices have managed to recover about 66% of that sharp decline, as dip-buyers stepped in to test short-term support levels.
The question now: Is the selling over, or could we see another wave lower?
What the Charts Are Saying
The SPY’s recent bounce looks healthy on the surface, but under the hood, momentum remains fragile.
The oscillators are still flashing caution, with RSI failing to confirm the recovery and MACD struggling to turn back positive.
If price fails to regain the 20-day moving average with conviction, another leg lower could develop — potentially retesting the recent lows before any sustainable rebound takes shape.
The Tariff Effect
Adding to the technical tension are renewed tariff headlines, which have injected volatility back into equities.
Traders are now weighing the potential economic impact of new trade restrictions and the ripple effect on global growth.
Historically, tariff shocks tend to trigger short-term corrections followed by periods of sideways consolidation — as investors reprice risk and assess policy clarity.
The Bottom Line
For now, SPY remains stuck between short-term resistance near 670 and support around 650.
A decisive break in either direction will likely determine the next major move.
This is a market that rewards precision — not emotion.
Traders should stay flexible, manage risk closely, and avoid assuming that one strong rally means the storm has passed.
As always, discipline and structure are the best tools in volatile conditions.
Stay tuned — we’ll break down the next setup in next week’s Market Minute.