Post-Liberation Day Sell-Off – Crash or Correction?

Liberation Day has turned into a dramatic "blow the markets back out" day for the SPY, with a significant daily drop of nearly 6%, slicing decisively below the critical 200-day moving average at $574.46. Historically, breaking below the 200-day MA is a strong bearish signal, indicating potential further downside momentum.

The previously identified key bearish pivot, the "Best Price Short" at $565.16, served as a crucial resistance level from which sellers aggressively stepped in, intensifying today's sell-off. Given the current bearish sentiment, the next immediate downside targets without a significant bounce (dead-cat bounce) include:

Half 1 Short (Momentum target): $505.28 (already tested)

High Vol Momentum Target 1a: $497.66

Half 2 Short (secondary bearish momentum): $486.41

Extended Momentum Target (HH Vol Momo Target 2a): $475.16

For traders who missed the initial move, look to re-enter shorts if there's a modest retracement toward the previously broken "Weeks High Short" at $520.16, maintaining tight risk control with stops ideally set just above the "Best Price Short" ($565.16).

Critical levels summary:

Ideal Short Re-entry Zone: $520.16

Profit Targets: $497.66, $486.41, and ultimate $475.16

Stop Loss Area: Slightly above $565.16

Major Broken Support (Resistance now): 200-day MA at $574.46

Today's significant volume spike further reinforces bearish conviction. RSI is deeply oversold at 23.24, suggesting caution for potential short-term bounce, but any bounce is likely to be short-lived unless there's a substantial political or economic pivot soon.

These levels are algorithmically defined, designed to remove emotions from trading. Trade responsibly, adhere to your strategy, and protect your capital.