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SPY: Breakdown?

JR Romero breaks down $SPY to show you what could signal a drop to $740.

 The Technical Setup: A Triangle at a Crossroads
 
SPY has formed an ascending triangle, but the price action is giving off late-stage bull market signals.
 
Without broader market breadth and renewed leadership from the Mag 7 big boys like Nvidia, Tesla, and Amazon sustaining momentum at these levels becomes an uphill battle.
 
JR highlights several key levels on the daily chart:
 
  • Immediate Support ($765.50 – $766): This high-volume node represents critical trendline support that bulls need to defend ASAP.
  • The Volume Gap ($761): Slipping below the trendline risks a fast drop down toward $761.
  • The Liquidation Target ($739.25 – $740): Failing support could trigger a “liquidation break” where everyone dumps at the same time. This push targets a major confluence zone combining the lower anchored VWAP band with the primary volume Point of Control (POC).
Pullback = Massive Opportunity?
 
A flush toward $740 would not mean the sky is falling.
 
A shakeout at the 200-day moving average and printing a hammer candle or V-shaped reversal could mean an awesome time to buy. For patient swing traders, a washout provides a much cleaner risk-to-reward entry than chasing extended highs.
 
The Core Lesson: Trade Your Edge!
 
Navigating a late-cycle bull market ain’t easy. While experienced traders who work across multiple market styles can capitalize on the chop, pure continuation traders have it tough.
 
If the setups you see don’t align with your edge, then do two things.
 
Sit.
 
And.
 
Wait.

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