SPY's Make-or-Break Moment: Will $590 Hold or Collapse? Feb. 26

Technical Analysis (TA) & Price Action
SPY has been in a clear downtrend, forming a falling wedge pattern on the 1-hour chart, which could indicate an upcoming reversal if price action confirms a breakout. The ETF is currently testing a crucial support level at $590, aligning with major options positioning.

Key observations:
* Trend Structure: SPY is in a downtrend, but the falling wedge suggests a possible relief bounce.

* Support & Resistance:
* Major Resistance: $605 (breakout confirmation level).
* Key Support: $590 → If this breaks, expect further downside toward $580.
* Breakout Target: $610 - $615 if momentum shifts.

* MACD Indicator: Slight bullish divergence, signaling early signs of momentum recovery.
* Stoch RSI: Extremely overbought at 96.22, suggesting a pullback before a possible reversal.

Options Flow & GEX Analysis

The GEX (Gamma Exposure) indicator shows extreme negative gamma, with heavy PUT positioning at $590. If this level holds, a short squeeze could drive SPY back to $605-$610. However, a break below would likely trigger a further gamma-driven selloff toward $580.
* IVR (Implied Volatility Rank): 29.7, with IVx avg at 20.2%, signaling moderate volatility.
* Put Side Bias: 121.8% of options flow, showing heavy downside hedging.

* Key GEX Levels:
* PUT Wall & Key Support: $590 → A breakdown could lead to a fast drop to $580.
* CALL Resistance & Upside Target: $605 → Breakout here could send SPY toward $615+.

Trade Plan & Suggestions
📌 Bullish Reversal Setup (Preferred Play)
* Entry: Above $600 with strong volume confirmation.
* Target 1: $605
* Target 2: $610-$615 (Extended breakout target).
* Stop-loss: Below $589

📌 Bearish Breakdown Setup (Hedge Play)
* Entry: Below $589 with increasing sell pressure.
* Target: $585 → $580
* Stop-loss: Above $595

Final Thoughts
SPY is at a critical inflection point, with $590 acting as the battleground. If it holds, expect a short squeeze rally toward $605+. But if it fails, the next leg down could accelerate toward $580. Given the extreme options positioning, expect high volatility and fast moves.

📢 Risk Management: Use defined stop-losses, watch for volume confirmation, and be prepared for sharp price swings.

🔹 Disclaimer: This analysis is for educational purposes only and does not constitute financial advice. Always conduct your own research and manage risk accordingly before trading.