S&P 500 Market Analysis - Should I Buy The Dip?
SPY’s price action is currently testing and rebounding off the 50-day exponential moving average (EMA), which coincides with a key rising trendline extending from the September lows. This technical convergence has attracted early dip buyers, resulting in a modest green candle that reflects initial support and short-term buying interest. Despite this reaction, the broader context suggests the move is part of an ongoing pullback within an intermediate uptrend, implying that the bounce could represent a technical retest rather than a confirmed reversal. The 674–681 resistance range remains pivotal; sustained trade above that zone on rising volume and momentum would validate the move as a genuine buy-the-dip continuation setup. Conversely, if price fails to hold above 674 and the VME histogram extends its red readings, it would indicate a corrective bounce rather than accumulation. In essence, SPY is positioned at a critical juncture — the 50 EMA reaction marks a potential early entry for nimble traders, but confirmation through both price and volume energy expansion is necessary before considering it a strong conviction setup.
Meanwhile, the Volumetric Momentum Engine (VME) highlights a market environment where downside energy persists but is beginning to lose strength. Both the short-term and long-term momentum lines remain below zero, confirming a still-bearish bias, yet the faster (orange) line is beginning to curl upward as the slower (blue) line stabilizes, hinting that selling pressure may be plateauing. This formation often develops near the late stages of a correction, when institutional participants start cautiously reaccumulating while retail sentiment remains defensive. For now, the indicator portrays a bearish-to-neutral tone — suggesting that while sellers are no longer pressing aggressively, buyers have not yet established enough conviction to confirm a full reversal.
Dated: 11/07/2025
S&P 500 Daily Chart
Disclaimer:
I am not a licensed financial advisor, and the information provided is for educational and informational purposes only. It should not be considered financial, investment, or tax advice. Please consult with a qualified financial professional before making any financial decisions.