Most traders think of uncertainty as a bad thing — as if the market suddenly panics anytime something isn’t set in stone. But in my experience, uncertainty isn’t just about market sell-offs.
It’s about choppiness.
When the market has conviction, it trends. If investors are certain earnings will be terrible, stocks move lower. If they’re confident the economy is strengthening, stocks trend higher.
But when there’s no clear consensus — when we’re stuck between mixed data, political negotiations, or Fed uncertainty — the market gets stuck in a range. And that’s exactly what we’re dealing with right now.
Take the S&P 500 ETF (SPY).
Since November, I’ve been pointing to $610 as a critical level, and gamma has confirmed its importance. Below that, 570 to 575 has been a key range. We’re bouncing between these levels because there’s no certainty about the next move.
A great example of this is the ongoing tariff negotiations.
We know tariffs are in play, but we don’t know what the final deals will look like. One day, a country is facing new trade restrictions. The next day, those restrictions are delayed. That’s uncertainty.
And as long as the market isn’t sure how those negotiations will shake out, we’ll keep chopping around.
Here’s how I look at it: Certainty means the market is moving toward something. If investors believe economic conditions are deteriorating, they’ll push stocks lower. If they’re confident a major risk has been resolved, they’ll drive stocks higher.
Right now, we’re stuck because the market is waiting for answers.
Until we get clarity — whether it’s on earnings trends, interest rates or trade policies — the S&P 500 is likely to stay range-bound. That means traders need to adjust.
This is not the time for blindly taking breakout trades. If the market keeps rejecting a level like 610, that tells you something. If 570 holds repeatedly, that tells you something too.
So instead of thinking uncertainty means an automatic drop, recognize what it actually does: It keeps the market in a volatile range. And until something shifts that brings a real sense of direction, this choppiness is here to stay.
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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