$SPY The Wedge of Truth + the latest AAII Bulls/Be

$SPY

The Wedge of Truth + the latest AAII Bulls/Bears sentiment indecision.

The Wedge of Truth is here.

$SPY is compressing into CPI/PPI next week while investor sentiment is almost perfectly split.

This is not a clean bull breakout.

This is not full bear capitulation.

This is a market waiting for inflation data to pick the next direction.

AAII sentiment for the week ending 7/8/2026:

Bullish: 36.3%

Neutral: 26.5%

Bearish: 37.2%

That is about as indecisive as it gets.

Bears only lead bulls by 0.9 percentage points.

Nobody has control yet.

What stands out to me:

Historical averages show:

Bullish average: 37.5%

Neutral average: 31.5%

Bearish average: 31.0%

Current sentiment is not euphoric.

Bulls are slightly below average.

Bears are still above average.

That means the wall of worry is alive.

This matters because $SPY is sitting inside a technical compression zone.

We’ve had lower highs since $760.40.

Recently, $SPY rejected near $752.

Now price is hovering around:

Close: $746.05

8 EMA: $745.16

21 EMA: $743.16

50 SMA: $740.25

That is tight.

Very tight.

The wedge is saying the same thing the sentiment survey is saying:

The market is not committed.

Bulls are not chasing aggressively.

Bears are not pressing enough to break it down.

Everyone is waiting for the same thing....

Inflation data!!

Next week’s key catalysts:

Tuesday, July 14: CPI

Wednesday, July 15: PPI

Both at 8:30 AM ET.

These prints likely shape July positioning and the market’s view of year-end FOMC risk.

Cool data = bulls get oxygen.

Hot data = bears get ammo.

Bull case:

$SPY holds 743–745, reclaims 752, then attacks 760.

That would tell me the wedge is resolving higher and the market is willing to look through inflation risk.

A reclaim of $752 is the first real confirmation.

Until then, it’s still compression.

Bear case:

$SPY loses 743, then especially the 50 SMA near 740.

That would put the wedge at risk of breaking lower.

If CPI/PPI come in hot, the market may start pricing in more hawkish Fed pressure into year-end.

That opens the door toward the 730s.

The key takeaway:

AAII sentiment is split.

$SPY is compressed.

Inflation data is the catalyst.

This is why I’m calling this setup:

The Wedge of Truth.

The next move likely comes from CPI/PPI, not opinions.

Trade the reaction.

Protect capital first.

Prepare for expansion either way.

Not financial advice.