Market Insights: Wednesday, April 23rd, 2025

Market Overview

Stocks roared higher on Wednesday, lifted by a wave of optimism following a notable shift in President Trump's tone regarding both the Federal Reserve and U.S.-China trade policy. The Dow surged more than 400 points, the Nasdaq jumped 2.5%, and the S&P 500 gained nearly 1.7% before late-session profit-taking pared back the earlier rally. Traders cheered Trump’s reassurances that he has "no intention" of firing Fed Chair Jerome Powell, calming fears over the Fed’s independence. His softened stance on tariffs also stoked hopes that some of the most aggressive duties on Chinese imports might be reduced. At one point, the Nasdaq was up over 4% and the Dow had tacked on about 1,100 points, but these gains cooled after Treasury Secretary Scott Bessent clarified there was “no unilateral offer” to end the trade dispute. Despite the retreat, sentiment stayed positive as Trump suggested Chinese tariffs could come down "substantially," calling them "unsustainable." Meanwhile, Trump reiterated he never truly intended to remove Powell, although he continued to press for lower rates. The day’s rally was further fueled by Tesla’s 5% surge following its earnings release, where CEO Elon Musk shifted focus away from DOGE, and big tech like Nvidia, Meta, and Amazon each gained about 4%. Bitcoin also briefly topped $94,000 before settling lower. Though the mega-rally faded into the close, the market welcomed Trump’s more conciliatory tone, easing immediate fears and supporting a strong session overall.

SPY Performance

SPY climbed 1.55% to close at $535.42 after opening at $540.43 and trading between a high of $545.43 and a low of $533.88. Volume surged to 83.59 million shares, well above average, signaling heightened participation during the rally attempt. Despite closing well off the day’s highs, SPY managed to reclaim the pivotal $535 level, a key battleground in recent sessions. The strong open and high volume reflected the initial enthusiasm, though the inability to hold above $540 highlights ongoing resistance and profit-taking pressures.

Major Indices Performance

The Nasdaq led the charge, soaring 2.5% as tech stocks rebounded sharply. The Russell 2000 followed with a 1.47% gain, supported by a broader appetite for risk. The S&P 500 rose 1.7%, while the Dow trailed slightly with a 1.07% advance. Markets initially surged on relief that Fed independence would remain intact and that trade tensions might cool, but late-session headlines tempered enthusiasm. Sector performance skewed heavily towards growth and technology, with defensive plays lagging as risk-on sentiment took hold.

Notable Stock Movements

It was a solid green day for the Magnificent Seven, with Tesla leading the pack, jumping over 5% after earnings. Amazon wasn’t far behind, climbing more than 4%, while Meta and Nvidia each posted nearly 4% gains. The rest of the group also rallied strongly, reflecting a broad rebound in tech. Tesla’s rise came despite missing estimates, as investors reacted positively to Elon Musk’s plans to reduce distractions and focus more on core business drivers. Overall, the group’s performance underscored renewed confidence in growth stocks, buoyed by easing macro concerns.

Commodity and Cryptocurrency Updates

Crude oil dropped 1.98% to $62.26, extending its pullback as traders priced in lower demand amid a stronger dollar. Our long-term outlook still targets $50 as a buy zone, although short-term bounces are possible. Gold sank 2.72% to $3,287, retreating from recent highs as risk appetite returned and yields firmed. Bitcoin advanced 0.93% to close just above $93,600, extending gains as investors sought alternative assets. We remain buyers between $77,000 and $83,000, taking profits above $85K, but warn against buying below $77K due to downside risks.

Treasury Yield Information

The 10-year Treasury yield edged down 0.30% to 4.376%, still below the danger zone above 4.5% where equities could face significant pressure. Despite a slight dip, yields remain elevated, reflecting persistent inflation concerns. If yields push toward 4.8% or higher, equity markets could see accelerated downside. The current level offers limited relief, and the bond market continues to flash caution signals, especially with upcoming economic data and Fed commentary on the horizon.

Previous Day’s Forecast Analysis

There was no forecast for today as our systems were updated and as a result, we were unable to deliver the Tuesday post market newsletter. On Monday, the forecast anticipated a trading range for Tuesday of $518 to $538, with key resistance at $532 and $535 and support at $525 and $520. The model suggested that a break above $535 could open the door to $540, while a drop below $525 would target $520 and $515. The forecast leaned bearish but noted the potential for sharp reversals due to elevated volatility. Traders were advised to remain flexible, watching for failed breakouts near $535 and breakdowns near $520.

Market Performance vs. Forecast

SPY traded within and just above Monday’s projected range, hitting a low of $533.88 and a high of $545.43, closing at $535.42. The market decisively broke through the $535 resistance, testing the upper range and pushing toward $545 before pulling back. The forecast accurately highlighted the significance of $535, which acted as both a resistance and pivotal close level. Long trades off $533 and short opportunities near $545 played out well. The model’s caution around elevated volatility and potential for a trending move proved valuable, with SPY’s range expansion offering actionable setups.

Premarket Analysis Summary

In today’s premarket analysis posted at 8:16 AM, SPY was trading at $538.64 with a bias level at $535. The outlook suggested a bullish tilt as long as SPY held above $535, targeting $540 and $546 on the upside. Below $535, a quick drop to $528.25 and possibly $524 was expected. The market was seen as likely to support dips, favoring careful long entries unless $535 failed, in which case short entries were favored on a breakdown.

Validation of the Analysis

SPY adhered closely to the premarket analysis, opening above $540 and briefly pushing toward $545 before fading. The $535 bias level held significance, with SPY closing right at this mark. The rally to $545 aligned with the upside targets, while late-session weakness highlighted the expected stall and consolidation. Traders who followed the guidance—buying dips above $535 and watching for exhaustion near $545—had multiple opportunities. The analysis effectively captured the day’s range and key levels.

Looking Ahead

Thursday brings Unemployment Claims, the primary economic report likely to influence markets. Friday’s calendar is light, setting up a quieter end to the week. However, next week ramps up with JOLTS, ADP Payroll, GDP, PCE, and the Monthly Jobs Report—all potential catalysts for renewed volatility. Traders should brace for headline-driven action as earnings season progresses and macro data comes into focus.

Market Sentiment and Key Levels

SPY’s close at $535.42 keeps the market finely balanced at a key pivot level. Sentiment remains cautious but with a bullish tilt after the recent rally. Resistance now sits at $540, $541, and $545. Support lies at $532, $530, $528, and $525. A move above $540 could accelerate gains toward $545, while a drop below $532 might lead to a gap fill to $530. Bulls need to defend $535 to maintain control, while bears will look to press below $530 for downside momentum.

Expected Price Action

Our AI model forecasts a trading range of $524.50 to $549 for Thursday—this is actionable intelligence. The wide range suggests potential trending price action. The bias is neutral to slightly bullish, with Call-side dominance supporting the recent rally. If SPY holds above $535, expect tests of $540 and possibly $545. A failure below $532 targets $528 and $525. Watch for failed breakouts at $545 or failed breakdowns at $532 as key trading signals. Volatility remains elevated, and traders should stay nimble.

Trading Strategy

Long trades are favored above $530, with upside targets at $540, $541, and $545. A break above $545 opens the door to $549. Short setups are actionable below $532, targeting $528, $525, and potentially lower, was well as on a retest of today’s highs. The VIX at 28.45 reflects ongoing fear and the potential for sharp reversals. Tight stops near resistance and wider stops on trend trades are advised. Manage risk carefully in this volatile environment, with smaller sizes until clearer trends emerge.

Model’s Projected Range

The model’s projected range for Tuesday is $524.50 to $549, with the Call side dominating. This indicates strength behind the recent relief rally seen over the past two days, in the context of a broadly volatile market. On Thursday, expect less trending behavior, with more two-way trading likely to persist. We remain cautious, viewing this as a relief rally within an ongoing bear market. With SPY closing right at $535, the bulls and bears are evenly matched. The $535 level serves as a critical pivot point—above it, the market leans bullish; below it, bearish sentiment prevails. While a short-term bottom may have formed, the broader market still appears vulnerable to another selloff in the $565–$585 zone, with a possible revisit or breach of recent lows. Historically, declines of this nature tend to develop 4 to 16 weeks after an initial bottom. We strongly advise considering protective strategies or reducing long exposure as the market approaches key resistance areas. With earnings season underway, many companies are expected to highlight tariffs in their cautious forward guidance, adding to already elevated volatility driven by current administration policies. Key Technical Levels for Thursday: Resistance: $540, $541, $545. Support: $532, $530, $528, $525. Thursday is expected to be relatively quiet in terms of news, with Unemployment Claims being the main report that could move markets. After two strong sessions that briefly pushed SPY above $535 to as high as $545, some consolidation or choppiness is likely. Bulls need to maintain levels above $535 to challenge higher prices, with a potential path to full control if they can close above $585. Conversely, if bears push SPY below $535, a gap fill to $530 is likely before the market chooses its next direction. Tariffs, bond yields, and inflation remain the dominant macro forces likely to influence market action over the next 90 days—or until more definitive signals emerge from the White House. The VIX closed at 28.45, signaling ongoing market fear and the potential for further declines. A drop in the VIX below 23 would favor the bulls. The broader bearish trend channel from the December highs remains intact, with SPY currently trading near the upper boundary. While movement in either direction is possible within this structure, price action is expected to remain largely contained, with significant resistance near $555 and support around $465. Momentum has recently shifted in favor of the bulls, and the move is directional. However, in this volatile environment, we continue to recommend staying nimble and ready for swift changes in market direction. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI is currently in a narrow Ranging Market State, with price closing just above MSI support. The narrow range implies a likely directional move once SPY breaks out of the narrow MSI range of $535 to $536.50. Overnight, price gapped higher in a bullish MSI state, printing extended targets up and until the open. But shortly after SPY reached the day’s high and the MSI stopped printing extended targets which saw price give way, falling back to the $535 dividing line between the bulls and the bears. Currently, MSI support stands at $535.01, with resistance at $536.73.
Key Levels and Market Movements:
We didn’t publish our usual post-market newsletter on Tuesday and instead noted that we expected SPY to hold above $525 with a bullish bias. However, we also advised caution, as the broader trend remains negative, suggesting the market could see movement in both directions. With this limited plan going into the session, we observed a textbook failed breakout at the day’s highs around 10 AM. When extended targets stopped printing, we entered short, using the premarket report for guidance on our first target. The closest level to our entry was $540, where we took off 70% of the position and held our runners for a second target at MSI resistance-turned-support at $537.50. That target was reached by 11:30 AM, so we took off another 20% of our position and moved our stop to breakeven, holding the remaining 10% to see if SPY would test $535. SPY hit $535 by 12:20 PM, and while the MSI briefly shifted to a bearish state, the range was tight with no extended targets below. SPY then set up another textbook failed breakdown, prompting us to reverse long at $534.90. Our first target was MSI resistance at $536.75, which was hit quickly, followed by a second target at $537.59. With our stop at breakeven, we let the remaining 10% run, aiming for a retest of $540 or higher. SPY reached $539.60 before pulling back sharply. We exited our long on a double top at $538.75 and wrapped up trading around 2 PM. We avoided overtrading near $535, recognizing it as a key pivot between bulls and bears, likely to bring chop—and that’s exactly what played out in the final two hours. Still, it was a strong day: two for two, with one significant short and a solid long, both based on failed patterns. We stuck to our core mantra—have a solid plan, execute with discipline, and let the MSI and model levels guide every decision. The MSI shows who’s in control, when control shifts, and where key actionable levels lie, enabling precise entries and exits. Combined with our model levels and daily strategy, it keeps us aligned with dominant market forces. It continues to deliver with high precision, helping traders avoid traps, stay in sync with momentum, and take profits with confidence. We strongly recommend integrating the MSI into your trading toolkit. Paired with a structured plan, it becomes a powerful driver of long-term performance.
Trading Strategy Based on MSI:
Thursday brings little economic data, aside from Unemployment Claims, which will eventually reflect economic weakness—though that’s not likely to be the case tomorrow. Of course, anything can happen, but barring unexpected events, we expect more trending price action with opportunities for two-way trading as SPY retests both sides of today’s range. Our expectation for Thursday is that SPY will chop around, consolidating the gains of the past two days. To set up a breakout toward $555 and beyond, SPY needs to fill the range between $535 and $545. For the bulls, maintaining support above $535 is crucial to continue pressing higher. A failure to hold $534 would lead to a gap fill, could push the price down to $525 or lower. There remains heavy resistance above $545, extending all the way to $550, so any move above today’s highs is likely to be slow and deliberate. While the edge has shifted toward the bulls, price action around $535 can change things quickly. Bulls don’t regain full control unless price reclaims $585, so caution is still warranted. As always, trade what you see. Lean on the MSI and stay nimble. The MSI updates in real time, revealing intraday structure and momentum shifts, preventing you from getting stuck in outdated narratives or stale assumptions. For Thursday, expect two-way trading, focusing on failed breakouts and failed breakdowns. Avoid trading into extended targets or trying to fight a wide MSI range. The Premarket Report provides fresh data and AI-driven insights to shape your daily strategy. The MSI shows real-time momentum and control shifts, while our model levels define high-probability targets and precise entry zones. Used together, the MSI and model levels keep you in sync with dominant market forces and help you avoid costly missteps. If you’re not already using these tools, now is the time. Reach out to your rep—these are game-changers in environments like this.

Dealer Positioning Analysis

Summary of Current Dealer Positioning:
Dealers are selling $536 to $575 and higher strike Calls while selling $529 to $535 Puts implying the Dealers belief that prices will continue to rally on Thursday. Dealers do not sell close to the money Puts unless they firmly believe prices will stay above their strikes. To the downside Dealers are buying $528 to $475 and lower strike Puts in a 2:1 ratio to the Calls/Puts they are selling/buying, implying a neutral to slightly bullish posture for Thursday. Dealer positioning is unchanged from neutral/slightly bullish to neutral/slightly bullish.
Looking Ahead to Friday:
Dealers are selling $536 to $570 and higher strike Calls implying Dealers see a top in the market for this week at $550. To the downside, Dealers are buying $535 to $435 and lower strike Puts in a 3:1 ratio to the Calls they’re buying. This reflects a slightly bearish outlook for the rest of the week. It seems that Dealers are protection heavily if price falls below $525 but also are open to prices continuing to rise to $550 or slightly higher. Dealer positioning has changed from bearish to slightly bearish. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly and tracking them is essential for staying ahead of shifting market sentiment.

Recommendation for Traders

With SPY closing at $535.42 and the VIX still elevated at 28.45, traders should stay alert, and risk focused. Long trades are viable if SPY holds above $534, targeting $540 and $545, while short setups are best below $534 aiming for $528 and $525, or from the day’s highs. Use tight stops and stay nimble, especially with Thursday’s Unemployment Claims on deck. High volatility demands smaller positions and flexible strategies. Review our premarket analysis before 9:00 AM ET to stay aligned with evolving market conditions and Dealer positioning.

Good luck and good trading!