SPY is now giving us one of the cleaner technical tests we have had in weeks

6/17/20264 min read

SPY Trading Plan: The Pre-Drawn Trendline Called the Top - Now the Gamma Flip Is the Line That Matters

SPY is now giving us one of the cleaner technical tests we have had in weeks. The key point is not simply that price pulled back from the highs. The more important point is where the rejection happened. Our upper trendline was drawn in advance, before price ever reached it. It was originally marked in blue as a projected resistance line, and once SPY finally tagged it, price rejected almost immediately.

That matters because this was not a line drawn after the fact. It was a forecasted resistance zone that price respected almost perfectly. The line has now gone from a projected resistance guide to a confirmed live resistance line. When price tags a pre-drawn upper boundary near a potential final-wave structure and immediately fails, that deserves respect.

This strengthens the June top thesis. It does not prove the high is locked in, but it gives the bearish case a much stronger technical foundation. SPY tagged the upper trendline near the projected wave (v) / upper-channel zone, failed to sustain, and then started rolling back through the intraday structure. The immediate structure has changed. SPY recently pushed into the 755-756 area, failed, lost the 754.22 shelf, then started working lower toward the 751-750 region.

The latest end-of-day GEX map now shows the gamma flip at 745.81, with SPY last around 750.33. That means SPY is still technically above the flip, but the cushion is thin. Price is only about 4.52 points above the flip, which is not much room. In other words, SPY does not need a crash to shift the dealer regime. It just needs a normal weak open, a failed bounce, or one clean sell program. That is why the new GEX dashboard is so important. The put wall is 750.00, the call wall is also 750.00, and the gamma flip is 745.81.

When both walls are sitting at the same strike, that level can become a magnet and reaction zone. It can pin price temporarily, but if SPY starts losing that area cleanly, the next test becomes the flip. Above the flip, dealer positioning is generally more stabilizing. Below the flip, volatility risk can expand quickly, especially with IV already ticking higher into the final hour of trading.

The IV picture also matters. The latest dashboard shows implied volatility at 13.71%, historic volatility at 14.30%, IV Rank at 17.38%, and IV Percentile at 38%. Options are still not expensive compared with recent history, but the fact that IV started ticking higher late in the day is the warning. The market is not panicking yet, but premium is starting to get bid again.

That often happens before a larger directional move, especially when price is sitting close to the gamma flip. The daily chart also supports caution. RSI recovered from the prior washout, but it is not showing runaway momentum. The bounce carried price back into resistance, but price failed near the upper trendline and remains vulnerable underneath the recent high structure.

The 21-day moving average is around 745.21-745.80, which now overlaps almost directly with the 745.81 gamma flip. That creates a major confluence zone. If SPY loses that region, the market would not just be losing a moving average. It would also be slipping under the gamma flip at the same time. That is the level where the tone can change fast.

Above 756.68, the squeeze can continue toward 760.40-760.53. That remains the prior high / 1.618 extension zone and the most important upside resistance. If SPY reclaims and closes above 760.53, the bearish top thesis weakens and the next stretch area becomes 766.35-767.00. However, chasing calls into 755-760 is still dangerous because that is the same area where supply has already shown up.

Bulls need acceptance, not just a wick. Bearish Case The bearish case begins if SPY fails below 751.56-752.79 and loses 750.00 with momentum. That would confirm that the market is no longer accepting above the wall. Below 749.10, the next downside magnet becomes the gamma flip at 745.81. The real acceleration trigger is 745.81. A break below that level would place SPY back under the gamma flip while IV is already starting to firm. That is where downside can become less orderly.

The first breakdown zone below the flip is 744.80-743.64. If that area fails, sellers likely regain control and the move can start targeting the broader lower structure. Below 743.64, the next major downside destination is 728.58. That level remains a critical support line on the broader daily structure. If SPY loses 728.58, the top thesis becomes much more serious and the chart opens toward deeper downside over the coming sessions. Trade Plan For calls, SPY needs to hold 750.00 and reclaim 751.56-752.79.

A clean hold above that zone can target 754.22, then 755.19-756.68. Above 756.68, the next upside target is 760.40-760.53. I would not chase late calls into 760+ unless SPY is showing real acceptance and breadth confirms. For puts, the clean setup is a rejection under 752.79-754.22, or a failed push into 755.19-756.68. If SPY loses 750.00, the first target is 749.10, then 745.81.

A break below 745.81 is the major trigger because it puts price below the gamma flip. Below that, watch 744.80-743.64, then 728.58. The best bearish setup would be a bounce that fails under 752.79-754.22, followed by a loss of 750.00. That would show that the market could not reclaim the broken shelf and is starting to rotate back toward the flip. Bottom Line SPY is still above the gamma flip, but barely. The market has moved from a comfortable positive gamma cushion to a much thinner one.

The flip is now sitting at 745.81, the 21-day moving average is in the same general area, and IV started ticking higher late in the day. That means SPY is still in a stabilizing regime on paper, but the cushion is narrow. The bigger technical story is that our pre-drawn upper trendline caught the high before price got there. Once price tagged that line, SPY rejected and began losing structure.

That strengthens the idea that the June high may already be in, or at minimum that bulls now carry the burden of proof. Above 750.00, bulls can still defend. Above 754.22, they can attempt another push toward 755.19-756.68. Above 760.53, the top thesis weakens. But below 750.00, the market starts leaning vulnerable. Below 745.81, the dealer regime shifts, and the downside risk becomes much more serious. For tomorrow, the entire plan is simple: 750 is the battleground. 745.81 is the trigger. 755-760 is the rejection zone bulls must overcome.

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