Trend Structure Holds: SPY currently trades above all major moving averages (50-, 100-, and 200-day), reinforcing the strength of the longer-term uptrend.

MACD Bearish Crossover: MACD line crossed below the signal line in late July, signaling decelerating upside momentum—raising the risk of a short-term pause or pullback.

RSI in Neutral Zone: RSI in the mid-50s suggests neither overbought nor oversold conditions, but the lack of upside momentum may reflect some buyer fatigue.

Volume Spike on Drawdown: The recent pullback from the $637 high occurred on elevated volume on 8/1, hinting at some distribution or reallocation.

Source: Bloomberg

Short Interest Insights:

Short Interest Rebuilding: After bottoming earlier this year near 84M shares, short interest has steadily climbed to 122M—suggesting rising caution, or increased hedging activity.

Inverse Correlation Resumes: The recent uptick in SI coincides with consolidation in price, reestablishing the historical inverse relationship between short positioning and SPY performance.

Positioning Insurance: The rise in short interest may also reflect tactical hedging rather than pure directional bearish conviction — a way for managers to stay long while protecting against downside.

Source: S3 Partners Black App

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The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (“S3 Partners”) to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks, and merits, as well as the legal, tax, accounting, and investment consequences, of such decisions.

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