The S&P 500 is in one of those frustrating spots where the market feels like it’s just drifting — not committing to a clear direction, but not falling apart either. It’s the kind of choppiness that makes trading feel like watching paint dry, and if you’re not careful, it can chew through your account with false breakouts and whipsaws.
Let’s break down where we are and what the technical levels are telling us.
Right now, the S&P 500 is at a bit of a decision point. It’s not a major one, but there are signals worth paying attention to. Earlier this week, we gapped down on Monday but managed to trade back up to the 50-day moving average (MA 50).
We even broke above it briefly, but the market is now struggling with the 8-day exponential moving average (EMA 8).
Why do these levels matter?
Because institutions and algorithms are watching them closely. The MA 50 and MA 200 are key moving averages that big money tracks. The EMA 8, though less commonly discussed, is a favorite among algos. That’s why I always have it on my charts — it gives me a window into where algos might be triggering trades.
Since November, I’ve been pointing out the $610 level in the S&P 500 ETF (SPY) as critical. Even before we hit it, gamma was signaling that 610 could act as a major resistance point — and it has.
Another important range is 570 to 575. I say “range” because markets rarely respect exact levels. With the current volatility, giving yourself a five-point buffer is smart.
Here’s what this means in practical terms: As long as we stay within the 570 to 610 range, the market is uncertain. And uncertainty doesn’t always mean a sell-off is imminent.
Most people assume the market hates uncertainty and will drop in response. But in my view, uncertainty just means we’re stuck in a choppy, sideways environment.
Certainty is what drives trends — up or down.
If the market becomes certain that earnings will be terrible, we’ll trend lower. If certainty returns because of positive economic data or a resolution to geopolitical tensions, we’ll trend higher.
But until that certainty arrives, we’re going to keep bouncing between these levels.
A break above 610 with conviction would signal that the market is ready to move higher. But if we fail at that level and fall below 575 — or especially if we breach the MA 200 — that’s when I’d get concerned about a deeper move to the downside.
For now, though, we’re in chop city.
And in this kind of environment, it’s tough to have high-conviction trades. The key is to stay nimble, watch those levels, and don’t force trades when the market isn’t giving you clear signals.
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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