Sideways consolidation has been the name of the game for the last two weeks. SPY has rejected the key 2015 analog target of $604 twice now and has closed below the 10-day EMA three times since last Friday. That’s notable considering SPY hadn’t even really tested the 10-day EMA—outside of a brief one-day dip on May 23rd—for two months, since the April 23rd gap up.

That said, fading volume, declining momentum, and sideways action don’t automatically mean the market is headed lower. But it usually means you’re closer to a top than a bottom.

Because the market has consolidated at the highs for a bit now, it still has the potential to break out into new all-time highs, trigger FOMO buys at the top, and then roll over—very much like we saw in our 2015 and 2018 analogs. In 2018, we did get that final new high before the sell-off. In 2015, we didn’t. Of course, analogs aren’t perfect playbooks—but they give us a solid framework for what could play out based on historical price action.

SPY broke below its first main support at $600 this week, leaving $595 and $590 as the next key levels to watch. If we start closing below—or especially gapping below—those levels, I’ll lean more confidently toward the start of a real pullback. Until then, I remain cautious-to-neutral.

Yeah, I know—that’s probably the most boring stance to take. But patience during sideways, choppy markets is a critical skill to master. It’s frustrating, it’s boring, but it’s also where a lot of people make unnecessary mistakes. Sit tight, plan, and let the market show its hand.

SPY

Over the last several weeks in this newsletter and in RLT, we’ve been keeping a close eye on small caps—because frankly, that’s where most of the trading action has been. Many of the large caps we follow have already made their big moves.

IWM, in particular, has a pretty clean inverse head and shoulders pattern forming. If it plays out, a move into $220- $225 is very possible—especially if SPY grinds to new highs.

From a risk-management perspective, the setup is actually pretty straightforward. There’s actually a bearish 10-day EMA trade present, and IWM has the 100-day SMA sitting just below. More aggressive traders might choose to manage risk on a close below Wednesday’s candle, the bearish 10-EMA trigger. More conservative traders could use the 100-day SMA (around $206) as their level. If we break below $202.50 and the pink trendline, the immediate bullish thesis is likely invalidated.

IWM

BTC hasn’t given us much to work with over the last month. It’s been consolidating in a tight triangle since hitting its all-time high on May 22nd—which makes sense, considering it ran nearly 50% in just 43 days.

If we zoom out and look at this cycle as a whole, we’re likely much closer to the end than the beginning. From the 2022 lows, BTC is now up over 600%. Even if we double from here and hit that lofty $200K target, that’s still only a 100% gain. And sure, that’s an incredible move—but it’s not where the real asymmetrical opportunities lie.

I know it feels like Bitcoin can’t go down again—but it will. And when it does, it’ll fall harder and longer than most people expect. That’s when you want to be a heavy buyer. Not when it has 40–60% upside left in the tank.

With that in mind, I’m still planning to buy a dip into the mid-to-low $90,000s if we get it. I’ll do so knowing that a wick down into the mid-$80,000s is perfectly possible—and I’m prepared to add there, too. I still believe we’ll hit both Target 1 and likely Target 2 for this cycle, which makes the $90,000–$80,000 range an acceptable buy zone from a risk/reward standpoint.

I’ve been selling into strength in the $95,000–$105,000 region on IBIT, prepping for a pullback. If I can reload below where I sold—great. If not, I still have my core position to ride up into the targets.

If you want detailed BTC breakdowns, make sure to check out the Real Life Trading Slack channels where I post near-daily Bitcoin update videos.

BTC Zoomed Out

BTC Zoomed In