The Average True Range of the daily bar tells you how far SPY typically moves in a session. Framing your intraday targets against that expected range is a simple reality check: a target beyond a typical day's range is a low-probability reach, not a plan.
How to use it
Take the recent daily ATR (say, roughly the average daily point range over the last couple weeks) and project it from the open or the prior close to get a rough expected high and low for the day. Price that's already traveled most of its ATR is statistically stretched — continuation is less likely, reversion more so. Price early in the day with most of the ATR still available has room to run. It's a cousin of the options-implied expected move, derived from realized range instead of implied vol.
Framing targets and skips
Use the ATR range to size ambition: on a quiet, low-ATR day, take smaller targets and expect fades to work; on a high-ATR day, targets can be further and trends run — but stops are wider, so size down. When price nears the edge of the expected daily range, favor reversion (fade) in a calm regime and respect continuation in a trending one — the same logic as the expected-move boundary trade.
If SPY usually moves X in a day and it's already moved X by noon, don't target another X. ATR keeps your targets inside reality.
The caveat
ATR is an average — some days blow through it (catalysts, trend days) and some fall short. It's a probabilistic frame, not a boundary that must hold, and it lags a sudden volatility shift. Cross-check it with the opening-range width and the regime: agreement between them gives a confident read on how big the day is likely to be.