Three Scenarios I'm Watching

SPY appears to be consolidating after a strong impulsive move, creating what currently resembles a potential bull flag on the hourly timeframe.

If this pattern completes with a confirmed breakout, the measured move projects toward approximately 820.

Important: A measured move is a projection—not a prediction. It does not imply SPY will necessarily reach 820 during August, or even that the pattern will complete successfully.

Historically, bull flags resolve higher only about 55% of the time, meaning failure remains a very real possibility.

My current scenarios:

🟡 Scenario 1 (Currently Favored):
Continued consolidation between roughly 760–774, allowing the market to digest the recent advance before choosing a direction.

🟢 Scenario 2:
Bull flag breakout with a measured move objective near 820.

🔴 Scenario 3:
Pattern failure leading to a bearish continuation lower.

This isn't a trade recommendation. It's simply the framework I'm using to think about the current market structure.

I don't personally trade long-dated options, but if you do, identifying the possible paths ahead may help you build a more informed strategy rather than reacting after the move has already begun.

As always...

Better information leads to better decisions.

— Heavy Diligence