Hey Traders,
Let’s talk about what’s really going on with this market right now.
Because if you’re looking at this week’s little bounce and thinking, “Maybe we’re back in bull territory…”
Pump the brakes.
We’re not.
In fact, the charts are screaming something completely different — and if you know how to read them, they’re giving you a crystal-clear warning:
This market is trapped… and the ceiling is coming down.
The Snapback Sucker Move
I’ve been tracking the SPY (S&P 500 ETF) using my usual 6-month daily chart — with my three trendlines in place:
- Green for the 20-day EMA (short-term)
- Blue for the 50-day EMA (intermediate)
- Red for the 200-day EMA (long-term)
And here’s what I’m seeing:
We’ve had a multiple crossovers to the downside:
First Crossover: The short-term (20 day) green trend dropped below the mid-term (50 day ) blue trend line.
Second Crossover: The green dropped below the long-term (200 day) red trend line.
Third Crossover: And now the blue mid-term trend has crossed below the red long-term trend.
That’s a full bearish alignment.
So yeah, we might get a little bounce — what I call a snapback rally — but make no mistake: the trend has turned, and the damage has already been done.
And now that the short-term trendline is above the price?
It’s not support anymore. It’s resistance.
That green line just turned into a ceiling — and the ceiling is coming down fast.
What That Means for Traders
Here’s the simplest way to think about it:
If the market is the ball, it hit the floor… bounced… and is about to smack into the ceiling.
Except this time, that ceiling is moving lower every day.
And once that pressure starts to build?
It squeezes the market down even harder.
Still Some Bright Spots
Now look — I’m not saying you can’t trade bullish setups.
I’m saying you better be selective as hell.
Take stock ticker BJ, for example. It’s one of the few names still trending strongly.
Notice how it hasn’t gone below its short-term 20 day trendline during this whole selloff? That’s strength.
You can use a stock like this for covered calls, naked puts, even spreads.
But a setup like BJ is rare right now.
Outside of maybe some gold plays like FNV — and even those are volatile — you’re scraping the bottom of the bullish barrel.
This Market Needs a Break
And not a “break” like a vacation. I mean a breakout — or more likely, a breakdown.
Right now the whole market is jammed up.
The trend’s bearish, resistance is overhead, and all signs are pointing to another leg lower unless something drastic changes.
I’m sticking with setups that lean bearish, sell premium, and keep the odds stacked in my favor.
Because when the ceiling’s coming down… the last thing you want to do is bet on the bounce.
Trade well,
Jack Carter
P.S. Here’s another strategy I’m using in this market – because that tariff chaos? It just send this into overdrive.
