If/when the SPY breaks below the 204.20ish support level, my expectation is for a swift move down towards at least the 197.85 area. Should this expected scenario of mine play out, it would likely have much deeper, lasting bearish implications as a break below the 204 area would also be a below the bottom of the trading range that has limited all drops in the $SPX/SPY since early February.
Trading ranges don’t last forever and based on the record low contractions in the monthly Bollinger Bands, this has been one of the tightest & longest sideways trading ranges in many years. Often large price moves come following such narrow & extended trading ranges.
SPY daily Aug 20th