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Let me ask you something — how much of your trading setup is dedicated to tracking the S&P 500 (SPY)?
I’m asking because I have two separate monitors dedicated entirely to SPY, and a third to the other major indexes and chip stocks. Not stocks. Not sector rotation. And there’s a reason for that…
If you want to know what the market’s doing or what it’s going to do, you’d better have a really good command of what SPY is doing — because it drives everything.
Sure, there are always exceptions, but the broader truth is simple: SPY is the heartbeat of the market. And a big part of that heartbeat comes down to volume.
SPY tends to follow volume, not the other way around, which means volume often gives you the earliest read on what the index is about to do. When volume expands, SPY reacts. When it dries up, SPY stalls. It’s one of the cleanest leading signals you can use.
Here’s how I set it up…
My left lower monitor displays one thing: the ProTrader dashboard for SPY.
My upper right monitor shows only the SPY five-minute and daily charts. And my right lower monitor tracks the Dow Jones Industrial Average, the Invesco QQQ Trust (QQQ) and the VanEck Semiconductor ETF (SMH) so I can see how the rest of the market is confirming or diverging from SPY’s move.
That’s why my entire setup still revolves around one ticker — because when you’re looking at any stock, whether it’s ExxonMobil (XOM) or a tech name, you need to know what SPY is doing in real time.
Why SPY Tells You Everything About Your Trade
There’s nothing like being able to read the market by using SPY. Let me give you an example.
Let’s say you’re looking at a stock and you want to go long, but the market’s volatility is dropping like a rock and there’s not a lot of momentum. Are you still going long that stock? Probably not.
That’s the edge. You’re not just looking at price action on one name. You’re reading the entire market through SPY — and that tells you whether your trade has institutional support behind it or if you’re fighting the tide.
A lot of what I do is based on what institutions are doing in real time, and one of my key metrics is looking for stocks that are outperforming or underperforming SPY. If a stock is ripping higher while SPY is consolidating or pulling back, that’s relative strength.
That’s where I want to be.
Market internals play a big role here too. Tools like VOLD help you see whether the underlying momentum supports your trade. When VOLD is breaking out, you want to be aligned with that strength. It gives you confidence that the market has real breadth behind its move.
The Common Denominator in Every Trade
You might think this setup’s only useful for day trading SPY itself, but that’s not the point.
Whether you’re trading options, swing trading stocks or managing a portfolio, SPY is the common denominator. It’s the lens I use to filter every decision.
Another tool that ties into this is VWAP, which gives you fair value on a chart. When you overlay that with SPY movement and volume, you get a clear picture of whether price action is authentic or stretched. It helps you see when institutions are accumulating, when they’re backing away and when price is reverting to equilibrium.
When you start using SPY alongside volume, market internals and VWAP, you begin to see the market from a completely different angle. You’re not reacting to noise. You’re trading with conviction because you understand what’s driving the broader market.
So here’s my question for you…
How much of your setup is dedicated to tracking SPY? If the answer’s not much, it might be time to rethink your approach.
I hope that helps!
Roger Scott
Roger Scott Trading
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