SPY is likely to find support between 530 and 550

The SPY ETF (SPDR S&P 500 ETF Trust) recently peaked at 613.23, reaching the upper boundary of a long-term channel that has been in place since 2009. This suggests the market is in an overbought state. Looking at historical trends suggests that the continuation of previous upward trends became unsustainable after reaching critical levels. The current correction signals that the market is adjusting toward a healthier upward trend.

The long-term trend since 2009 remains intact. However, the upward trend that began in 2023 is broken, with the price now trading below the 200-day moving average and previous lows. Overall, the long-term trend is strong, and historical momentum suggests that SPY could find support between 530 and 550. In a worst-case scenario, the price may decline toward the key support zone of 490 to 500. The recent correction also suggests that any rebound could be sharp and V-shaped.