metal1, you're right: no-one ever trades the SPY to express a belief about the future value of the S&P500. no-one trading the SPY ever makes trades from observing the futures, other stocks or anything but the value of the S&P500 index. silly me.
instead of buying all 500 s+p stocks you buy the SPY. it moves with the s+p. tape reading in these type of issues is irrelevant because thay move with the index they are tracked too. tape reading is for individual issues not index or basket stocks.
from my perspective any instrument that is traded and watched by a big enough population of traders can be "tape-read". thus raw indexes can't, futures can, ETFs can, stocks can.
i would say tape reading is being able to tell a future move in a stock from trades and quotes. in the case of the spy, qqq etc ,the index or basket it tracks is what you have to watch in order to guess the move not the tape. if you don't agree with me thats fine. thanks for listening.
well, I think the truth (whatever that means in trading) is in between. yes you can tape read them (a bit), but it is pointless because any 'reading' is likely to lag the tracked index or futures. And if there is one thing you don't know, is lag what the others know already. tape reading is not the holy grail you know. it's just a tool. a good one. but just a tool. tntneo