Everything is revolving around the S&P 500. Every company and cryptocurrency is trading in sync with the S&P 500. This happens because when fear or panic strikes, people want to first check if the S&P 500 is holding strong. If they see weakness, they sell their positions to prevent losses. That’s why I’ve dedicated an entire screen to the SPY chart and always check it before making any trades or long-term investments. Currently, the SPY is sitting on a crucial long-term trendline that began from the COVID lows and extends through the 2022 bear market lows. Alongside, there’s a horizontal trendline that starts from the market’s peak in 2021. These two trendlines together should act as support and could trigger a technical bounce in the markets, especially after the brutal 20% sell-off seen in just a few trading days. Looking at the chart, SPY has seen a significant sell-off, and now it's approaching the trendline support. If this support level holds (which is between 4,790 and 4,400), we could see a technical bounce in the market. However, if this support breaks, there’s a risk of further downside, and the SPY could drop below the 5,000 mark.
Keep an eye on this support level. If it holds, we may see upward movement, but if it breaks, there could be more downward pressure.
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