To The Moon

$SPDR S&P 500 ETF Trust(SPY)$ $S&P 500(.SPX)$ 📉📊🧨 Wyckoff strikes back: is SPY setting up for a Phase E markdown? 🧨📊📉

I’m extremely confident this week’s SPY setup is one of the clearest macro-to-micro inflection points we’ve seen all quarter. Price has broken down from a textbook Wyckoff Distribution schematic, completing Phase D with a potential markdown underway. At $621.11, SPY is teetering right above its 50-day SMA support zone ($611), where gamma positioning, realized vol, and institutional behavior are all colliding in a high-stakes tug-of-war.

The dual Wyckoff overlays speak volumes. The pre-Fed chart shows Phase A to UTAD accumulation with smart money driving rallies into resistance. Post-Fed, we’ve clearly transitioned into Phase D. The Last Point of Supply (LPSY) broke lower, and Sign of Weakness (SOW) candles have formed in sequence. The bearish structure implies Phase E could push SPY toward that $611 magnet: precisely where the 50 SMA converges with volume shelf support and early July breakout levels.

I’m watching $621 this week as the critical gamma flip. Puts are stacked below, calls above. The Put/Call volume data confirms it: for 4Aug expiry, total volume surged past 375K contracts, with puts dramatically outweighing calls. Highest strike clusters are loaded on 8Aug and 15Aug, making those dates the most magnetic for further downside. Open interest on 19Sep is now approaching 4 million contracts; again with puts dominating, implying longer-term hedges or bearish bets are building.

SPY’s 4H chart confirms the breakdown. We’ve sliced through the lower Keltner and Bollinger Bands with expanding range and falling volume. EMA13 and EMA21 crossed downward, and price just rejected off the EMA55. This confluence confirms trend deterioration. MACD and RSI are both weakening, with momentum flipping negative for the first time since early July.

Now, here’s the hidden risk: 1M realized correlation and volatility just hit extreme lows. According to Bloomberg and Deutsche Bank, correlation has dropped beneath 10; matching conditions that preceded sharp market inflection points in Mar23 and Feb25. Historically, these troughs foreshadowed tops, as the divergence between index strength and individual name weakness became unsustainable. In simple terms, this is a nightmare for stock pickers. It means the index can grind while your individual names get wrecked, or vice versa. We need correlation to rise again to improve trading conditions for selective setups.

Layer in macro: it’s Fed week aftermath, and we just got AMD earnings. It’s been flying hot on AI, but this may be the “sell the news” moment that takes heat off semis and tech. AMD’s strength into earnings was part of the narrative holding SPY up. If that fades, SPY loses a pillar of support.

There’s a scenario where a Monday put-close triggers a short-term gamma snapback. But unless SPY reclaims $629–$633 convincingly and rebuilds above that upper distribution line, I believe the path of least resistance remains to the downside. Short-term bounce? Maybe. Bigger structural breakdown? That’s what these charts are warning.

📌 My tactical focus: if $621 fails to hold on volume, I’ll be targeting $611 for first major support, and then reassessing downside momentum into 8Aug and 15Aug expiries. If $629–$633 is reclaimed with strength, I’ll rotate back to calls; but right now, the structure favors caution and tactical bearishness.

Are we looking at just another dip, or the start of a proper markdown in Phase E?

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀

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