SPY — PPI Prep + AOA Framework UpdateState Street SPDR S&P 500 ETFBATS:SPYheavydiligenceI probably won’t trade tomorrow, but I wanted to put this together anyway because the structure is too interesting not to map. PPI hits tomorrow at 8:30 AM ET. The important thing for me is not predicting whether PPI is good or bad. It’s understanding what price is sitting inside **before** the catalyst arrives, and what would matter after the initial reaction. The AOA framework is evolving Testing the new **Active AOA** this week helped me realize it can do more than simply show where current price agreement is developing. It can also help us identify which historical AOAs deserve more weight. I’m starting to think about them in three classes: **Standard AOA** A historical price level where candles previously showed meaningful agreement or reaction. **Zone AOA** A broader area rather than one exact line — basically what I’ve called the “chop box.” Price has repeatedly negotiated inside the region, so treating it as a zone makes more sense than pretending one dollar value controls everything. **Major AOA** An agreement level that keeps reappearing across multiple sessions and continues influencing price when revisited. That’s where the Active AOA has been useful. As it migrates through the market, we can look back and see which levels repeatedly became the active agreement area. Those repeated Active AOA locations can help us decide which static AOAs deserve promotion to **Major AOA** status. On this chart, the ~$771, ~$772 and especially ~$773 areas have repeatedly shown up in the conversation. That helps explain why the yellow scenario deserves real respect here. SPY isn’t sitting in empty space. It is sitting inside an established agreement structure. Tomorrow's scenarios Green — bullish expansion If PPI is constructive and price accepts above the upper structure, ~$775–776 becomes the important breakout conversation. The key word is **accepts**. I’m much less interested in the first PPI spike than whether price can hold above the structure after the excitement settles. Yellow — continued negotiation If PPI is basically another nothingburger, I can easily see SPY continuing to rotate around the current AOA structure. That means more negotiation around ~$772–774, false breaks, and traders getting chopped up trying to force direction where the market hasn’t chosen one. Structurally, this remains a very reasonable outcome. Red — bearish expansion If PPI materially changes the inflation story and sellers gain control, I’m watching ~$771 first. Below there, ~$768 becomes the larger structural test, with ~$765 beneath it. But even in the bearish scenario, I’m not interested in predicting or chasing a straight-line collapse. A violent move into one of those major areas could create exactly the kind of **overreaction setup** we like to study. ### Thursday may create Friday's structure One other reason these paths extend into Friday: Tomorrow’s reaction may not finish tomorrow. If PPI creates a meaningful move and the market **accepts** the new range, Friday may simply inherit that structure. Good catalyst → breakout → acceptance could give Friday a higher base. Bad catalyst → breakdown → acceptance could give Friday a lower base. And a violent Thursday move that **fails** at structure could set up an overreaction unwind into Friday. So Thursday may provide the catalyst. Friday may trade the acceptance. That’s the purpose of these scenarios. Not to tell you where SPY is going. To know what matters if it gets there. Preparation > Prediction.