SPY recap

After today’s unusual price action, SPY appears to be approaching its next resistance level at the trend line support from last night’s briefing. The price initially rejected 543 on CPI and at the open, surged past it by midday, and then sold off, dropping below 543. Despite the volatility, SPY managed to rally into the close.

VIX influence

A significant factor that prevented me from shorting SPY after the first half-hour was the VIX losing its wedge support after the CPI release. As the VIX trended downward, seller exhaustion allowed bulls to take control, with buyers stepping in during dips throughout the day.

SPY’s resistance and support levels

Looking ahead, I am interested to see where SPY will encounter resistance. I am watching the 543 level tomorrow for a strong open, and waiting to see whether bears will defend the 550 to 552 range into next week. Support levels to watch are 539 and 533.