SPY 661 - The Next Move Could Be Violent

At 665.5 overnight, SPY is attempting a stabilization bounce after tagging the 0.786 retracement zone near 661, which historically acts as a late-stage exhaustion level during corrective moves.

The key question into the open is whether this bounce is true demand stepping in or simply a relief rally inside a continuing descending channel. The first level I would watch is 668.7 (0.618 retracement) from the recent leg down.

If price pushes into that zone but fails to hold above it on a 5-minute close, that would suggest sellers are still controlling the structure and the market could roll back toward 662–661 support, with a breakdown opening the measured extension toward roughly 651, which aligns with the larger Fibonacci symmetry target on your chart. If buyers show real strength early and reclaim 668.7 and hold above it, the downside momentum likely pauses and the market can attempt a squeeze toward 674.2 (0.50 retracement) where the descending trendline and prior structure converge. That area would be the next major decision point.

My plan would be reactive rather than predictive: fade a rejection near 668-669 for puts targeting 662 - 661, but if the market instead accepts above 669, the trade flips to a bounce continuation setup targeting 674, where I would expect sellers to defend again. In short, 661 remains the structural floor for now, while 669 is the trigger level that determines whether this bounce evolves into a larger relief rally or simply resets the next leg lower.