SPY can easily crash 5-10% this week because its debt got downgraded by Moody's
$SPDR S&P 500 ETF Trust(SPY)$ can easily crash 5-10% this week because its debt got downgraded by Moody's.
But, this is a once in a lifetime opportunity to 10x your trading account.
Here's 4 critical levels to focus on for SPY
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History has shown that within a year SPY bounces back up to 40% from when it gets downgraded. This means I'd like to add options for strong companies espcially at my key levels.
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1. The first key level is under $590 closer to $585. This level buyers FOMO beccause they felt the market was going to leave without them. Its likely we get to this level.
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2. There is a massive continuation gap to fill between $570-$577. This is also where 200SMA is at $574. So this will be a magnet for bears to attack. Price will drive towards here if the market panics on the US debt downgrade.
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3. 200SMA is at $574. Its possible the SPY retests this area because of panic selling and Trump talks about tariffs again. I expect the SPY to defend this area this will be 20 point drop from where it is currently at.
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4. This is extremely unlikely to get to this week at $528-$535. But, US debt being downgraded is a very big NEGATIVE trigger so its possible we get here and fill the gap.
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- danielninetyfour·2025-05-20TOPMoody downgrade is a lagging indicator, nothing that hasnt already been priced in. Market ate back the initial shock on Fri post-market. We are back in the green.LikeReport