SPY Technical Analysis for Jan. 2, 2025

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1-Hour Chart Trading Analysis:

Current Observations:
* Trend: SPY is trading within a descending wedge pattern, suggesting a potential breakout soon.

* Volume: Slight increase on the recent candles, indicating growing interest.

* Indicators:
* MACD: Starting to show signs of bullish divergence, with the histogram nearing the zero line.

* Stochastic RSI: Moving upward from oversold territory, which is a positive signal for potential buying.

Trading Strategy:

* Bullish Scenario:
* Entry: Wait for a breakout above $588.60 with strong bullish momentum and increased volume.
* Stop Loss: Set below $577.24, the recent swing low.
* Target: First target at $595, with an extended target of $600.

* Bearish Scenario:
* Entry: If the price breaks below $577 with strong volume, enter a short position.
* Stop Loss: Place above $588.
* Target: First target at $570, with an extended target of $560.

Daily Chart GEX Analysis:
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Key Levels from GEX:
* HVL: $584.41 acts as a strong Gamma Wall, suggesting a potential reversal area.
* Call Resistance: Significant resistance at $595 and $600 levels.
* Put Support: Strong support at $577 and $560.

Options Strategy:

* Bullish Play:
* Call Option: Buy calls with a strike at $590, expiring in 2 weeks, targeting $600.
* Suggested Position Size: Moderate, as IV is relatively low.

* Bearish Play:
* Put Option: Buy puts with a strike at $575, targeting $565.
* Suggested Position Size: Moderate, as IV is stable.

Summary and Recommendations:
* Trading: Monitor for a breakout above or below the wedge. Ensure confirmation via volume and indicators.

* Options: Align with the trading direction, and choose strikes close to GEX levels for maximum leverage.

* Caution: The GEX data suggests strong resistance at $595-$600 and solid support at $577-$560, making those levels critical decision points.

Disclaimer:
This analysis is for educational purposes only and does not constitute financial advice. Always conduct your own research and manage risk effectively before making any trades.

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