- Aurea Stocks
- Posts
- Rejection at the Top: Is SPY Losing Steam?
Rejection at the Top: Is SPY Losing Steam?
The SPY has pushed aggressively higher since bouncing from the 200-day moving average in late May. However, over the last few sessions, especially today, we’re seeing signs of exhaustion just below a major resistance level, with the price stalling near ~599 USD. This could indicate that buyers are losing momentum, at least temporarily.
Profitus Trader
June 04, 2025
In partnership with
Fact-based news without bias awaits. Make 1440 your choice today.
Overwhelmed by biased news? Cut through the clutter and get straight facts with your daily 1440 digest. From politics to sports, join millions who start their day informed.
You’ve never experienced business news like this.
Morning Brew delivers business news the way busy professionals want it — quick, clear, and written like a human.
No jargon. No endless paragraphs. Just the day’s most important stories, with a dash of personality that makes them surprisingly fun to read.
No matter your industry, Morning Brew’s daily email keeps you up to speed on the news shaping your career and life—in a way you’ll actually enjoy.
Best part? It’s 100% free. Sign up in 15 seconds, and if you end up missing the long, drawn-out articles of traditional business media, you can always go back.
04/06/2025
🔎 Insights on the market 🔎
🧭 Detailed Chart Breakdown
SPY 1D left - SPY 1h right
SPY 1D
📍 What the Chart Tells Us
🛑 Resistance Cluster: 595.79 – 599.71 USD
The SPY has reached a supply zone between 595.79 and 599.71, clearly marked on the chart.
Today’s candle (June 4) is a small-bodied red candle with a long upper wick, right at the top of this zone — a classic sign of rejection and hesitation.
This level aligns with a prior breakdown area from February, making it a psychologically and technically significant zone.
📉 Short-Term Momentum: RSI Divergence Emerging
The RSI is elevated but starting to flatten, indicating slowing momentum despite price still climbing.
A possible bearish divergence is forming (higher highs in price, but flat or lower RSI highs), which often precedes short-term pullbacks or consolidations.
🔁 Support Zones Below
Immediate support sits at 592.76, which was resistance just last week — now potentially turning into support.
A stronger demand zone is seen near 585–588 USD, where previous consolidation occurred and where the 21 EMA is approaching.
The 200-day SMA remains well below (~565 USD), acting as long-term support.
🔎 Volume
Volume during this latest leg higher has been moderate to declining, which adds to the argument that this move may be losing conviction.
If a pullback occurs with light volume, it could be constructive. But increasing sell volume would be a warning signal.
🔮 Probable Scenarios for the Coming Days
🟢 Bullish Breakout
If the SPY can close above 600 with volume, it would be a significant breakout from the range that has capped it since January.
In that case, the target could shift to uncharted territory — likely the 610–615 USD range, based on Fibonacci extensions and psychological round numbers.
🟠 Consolidation or Minor Pullback
The most probable scenario: the SPY struggles to break 599 and pulls back toward 588–592 to consolidate.
This would allow momentum indicators to cool off and moving averages to catch up, especially the 9 EMA.
A healthy reset here would preserve the bullish structure and set up a cleaner breakout attempt later.
🔴 Bearish Reversal
If rejection intensifies and price falls below 585 USD with volume, this would break short-term bullish structure.
The next supports would be the 20, 50 EMA and 200-day SMA, likely areas for dip buyers to step in again.
📝 Bottom Line for Readers
The SPY is knocking on the door of its 2025 highs, but today’s rejection candle and weakening momentum suggest a pause may be imminent. Watch for follow-through in the coming sessions, either a clean breakout above 600 or a retest of lower supports. Volume and RSI divergence will be key indicators to gauge what’s next.
If you're not subscribed to receive these emails weekly and completely free, you can do so with the button below:
Reply