Usman Salis
The market's favorite ETF just hit the brakes after a stellar run to $646, and timing couldn't be worse. With Jerome Powell about to take the stage at Jackson Hole, traders are bracing for what could be the reality check that ends the summer rally.
The $646 Dream Dies Hard
SPY's meteoric rise to $646.19 was the stuff of bull market dreams – until reality started creeping back in. Now sitting around $636, the world's most popular ETF has cracked through the $632.85 support level that traders were counting on.
The technical damage is piling up. Next stops on the downside: $620, then $610, and if things get ugly, that psychological $600 level. That's a brutal 7% drop from recent highs – the kind of move that separates believers from fair-weather investors.
Powell's Moment of Truth
All eyes turn to Jackson Hole this Friday at 10 AM, where Jerome Powell will either calm markets or send them into a tailspin. The problem: markets are begging for dovish signals about September rate cuts, but Powell rarely gives traders what they want.
If Powell sounds less accommodating than expected or pushes back against rate-cut hopes, SPY could find itself in free fall. His track record at Jackson Hole shows he's never been one to make it easy on the bulls.
The Dip-Buyers Are Ready
Despite gathering storm clouds, some veterans are eyeing the bigger prize. As one analyst noted: "SPY can crash 5%-10% in August 2025 because of Jerome Powell... No matter what happens 'BUY THE DIP' for SPY target for year-end is still $675+."
A 5-10% correction would put SPY between $580-$614 – enough to wipe out weeks of gains but potentially create buying opportunities for long-term investors. For momentum chasers and leveraged positions? They're about to learn why risk management matters.
The next few days will determine whether SPY's retreat is just a pullback or something more substantial. Either way, Powell holds the cards.
Usman Salis
