I broke down yesterday why the S&P 500 (SPY) is stuck in one of the thickest liquidity zones we’ve seen in months. And today, I want to show you the one headline that could blow it wide open…
We’re still pinned between the 50- and 200-day moving averages — a zone packed with volume, bag holders and algo triggers. That kind of congestion doesn’t clear on momentum alone. It takes a catalyst.
And right now, the most powerful one isn’t earnings, inflation or the Fed. It’s tariffs.
The Trade Deal Bulls Are Hoping For
This entire resistance zone could unravel with a single headline: a major trade partner cuts a no-tariff deal with the U.S.
India is the most likely candidate. If we get a clean, zero-tariff agreement — no backdoor quotas, no gimmicks — that could send SPY surging above the 200-day and beyond.
Even better, if it becomes a template that gets reused with China, Europe or Canada, we’d have the kind of sustained bullish narrative this market hasn’t seen in a while.
It would remove the biggest headline risk weighing on equities, ease pressure on imports and pave the way for volatility to fall and risk-on flows to return.
Don’t Trade the Hope — Trade the Reaction
Could that headline come soon? Maybe. Is it guaranteed? Not at all. But with SPY grinding under heavy resistance, this is one of the only scenarios that could deliver a clean breakout.
Until that happens, the trade is still range-bound. Stay patient, stay nimble — but be ready. If the right news hits the wire, this whole zone could break wide open.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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