Market Insights: Wednesday, June 11th, 2025
Market Overview
Stocks took a step back on Wednesday, pausing a recent rally as traders absorbed a softer-than-expected inflation reading and watched for progress on U.S.-China trade talks. The Dow barely budged, ending the session flat, while the S&P 500 slipped 0.29%. The Nasdaq lagged, falling 0.5% amid weakness in key tech names. Before the bell, investors welcomed a cool May CPI report, which showed consumer prices rising just 0.1% month-over-month, less than expected. Core inflation, excluding food and energy, also rose a milder 0.1%, maintaining a 2.8% annual rate. The data bolstered hopes for a Fed rate cut, pushing the probability of a September cut to 57.2%, up from 53.5% the day before. Treasury yields declined on the news, with the 10-year yield falling to 4.41%. However, optimism was tempered by underwhelming developments in the U.S.-China trade negotiations. The latest framework to revive their Geneva tariff truce lacked clarity on key issues like export restrictions and tariff levels, leading to a muted market response. President Trump signaled some flexibility by easing restrictions on Chinese students, but without more details, investor enthusiasm faded by the afternoon. Overall, traders balanced dovish inflation data against continued trade uncertainty, resulting in a modest pullback across major indices.
SPY Performance
SPY pulled back slightly on Wednesday, slipping 0.29% to close at $601.36 after opening at $604.19 and trading in a wide $5.79 range. The ETF rallied early in response to softer CPI data, tagging a high of $605.06 in the premarket, but failed to hold those gains after U.S.-China trade headlines triggered selling pressure. Volume spiked to 70.49 million shares, marking a notable uptick from recent sessions. Despite the red close, SPY held above the $600 support level, a key technical zone, suggesting that the bullish structure remains intact heading into Thursday’s session.
Major Indices Performance
The Russell 2000 led the way lower Wednesday, falling 0.31% as small caps lost traction amid mixed sentiment. The Nasdaq followed with a 0.50% loss, weighed down by weakness in several of the largest tech names. The S&P 500 declined 0.29%, while the Dow finished unchanged on the day. Stocks initially rallied on better-than-expected CPI data, which bolstered expectations for Fed rate cuts. However, enthusiasm faded after details of the latest U.S.-China trade proposal appeared underwhelming. Defensive sectors held up relatively well as traders rotated away from risk-heavy assets, while cyclical sectors underperformed. Overall, sentiment remained cautious as traders awaited more clarity from upcoming economic reports.
Notable Stock Movements
It was a mostly red day for the Magnificent Seven, with Amazon, Apple, and Meta leading the group lower. Apple and Meta, in particular, saw continued pressure as investors reassessed high-valuation names following the CPI report. Tesla, Microsoft, and Netflix bucked the trend with modest gains, though they weren’t enough to offset broader tech weakness. The split performance underscores a market that remains highly selective, favoring names with clear catalysts while pulling back from overextended positions. Tech leadership continues to waver, signaling some investor hesitation even amid improving macro conditions.
Commodity and Cryptocurrency Updates
Crude oil surged 5.08% to $68.28, reversing its recent downtrend as escalating tensions in the Middle East stoked fears of a broader conflict. Despite this rally, our model continues to forecast a decline toward $60 and potentially $50, where we expect a long-term buying opportunity. The bounce appears tied to near-term dollar weakness and geopolitical concerns, but rising interest rates could soon cap upside potential. Gold dipped another 0.23% to $3,347, as investor appetite for riskier assets remains elevated. Bitcoin fell 1.09% to close just above $108,700. While we remain buyers between $83,000 and $77,000, we continue to warn against purchases below $77,000 due to the risk of a deeper correction.
Treasury Yield Information
The 10-year Treasury yield declined 0.29% to 4.424% on Wednesday, extending its slide after cooler CPI data helped reinforce expectations for a rate cut later this year. Yields remained comfortably below the critical 4.5% mark, providing some relief for equity markets. However, risks still loom. Should yields move back toward 4.8%, equity valuations especially among high-growth names could come under renewed pressure. For now, falling yields are offering breathing room, but the bond market remains sensitive to inflation data and Fed expectations.
Previous Day’s Forecast Analysis
Tuesday’s forecast called for a range of $598 to $605 with a slightly bullish outlook, emphasizing long trades above $600 with upside targets at $605 and $610. The analysis warned that momentum could wane quickly if inflation data disappointed, and urged caution around volatility. The trading strategy highlighted long setups above $600 and short entries below that level, targeting a retracement to $595 or $590. Traders were advised to stay nimble, especially given the CPI release and broader uncertainty surrounding trade negotiations.
Market Performance vs. Forecast
SPY’s Wednesday performance largely tracked the model’s forecast, though price action played out with more volatility than expected. The ETF opened strong at $604.19 and briefly tagged the $605 level, aligning with the upside targets from the forecast. However, SPY couldn’t hold those gains and reversed lower, ultimately closing at $601.36. This move respected the $600 support level while failing to sustain a breakout past $605, an outcome precisely highlighted in Tuesday’s strategy as a scenario where traders could consider tactical shorts. The day’s high, low, and close all fell within the projected range, validating the model’s framework. Long trades early in the session were profitable, particularly for those exiting near resistance. Likewise, short trades on failed breakouts above $605 likely delivered favorable results. The forecast’s emphasis on watching $600 as the key pivot proved accurate once again.
Premarket Analysis Summary
In Wednesday’s premarket analysis posted at 7:22 AM, SPY was trading at $601.85 with a mildly bullish bias and key upside levels at $602.50, $608, and $610. Support was identified at $600, $599, and $595. The analysis suggested that if SPY could break above the $602.50 bias level, traders should favor long entries targeting $608 or higher. Conversely, a break below $599 would tilt the outlook bearish, opening the door for a slide to $595 or lower. The premarket call advised against chasing downside momentum and preferred selling failed rallies near resistance while favoring long trades near support.
Validation of the Analysis
Wednesday’s action confirmed the strength of the premarket analysis. SPY initially surged past the $602.50 bias level, reaching a premarket high of $605.39. However, the rally lost steam near key resistance, and the ETF slipped back below $602.50, testing support at $600 and ultimately closing at $601.36. The predicted chop between $602.50 and $600 materialized, creating ideal setups for active traders who followed the plan. Those who avoided chasing downward momentum and instead focused on failed rallies or support-based entries were rewarded with well-timed trades. Once again, the premarket strategy offered a reliable roadmap for navigating the day’s price action.
Looking Ahead
Thursday’s focus shifts to Core PPI and Unemployment Claims, both of which could inject fresh volatility into the market. If producer inflation comes in hotter than expected, it may temper enthusiasm from Wednesday’s CPI print and push Treasury yields higher. Conversely, cooler PPI data could further solidify the case for a Fed rate cut. Jobless claims will also be closely watched for signs of labor market softening. These reports are likely to influence short-term sentiment and could determine whether SPY attempts to reclaim higher ground or remains stuck in its current range.
Market Sentiment and Key Levels
SPY finished Wednesday at $601.36, holding above the critical $600 support level but showing signs of hesitation near resistance. Market sentiment remains cautiously bullish, supported by soft inflation data and expectations of looser Fed policy. However, trade uncertainty and slowing momentum are capping upside potential. Key resistance lies at $603, $605, and $608, while support is firming at $600, $596, and $592. A breakout above $605 could ignite a run toward $610, while a break below $596 would likely shift control to the bears and threaten a move back toward $590 or even $585. For now, the bulls maintain the edge, but the path forward depends heavily on Thursday’s economic data.
Expected Price Action
Our AI model projects SPY’s expected trading range for Thursday between $597 and $604. The range has narrowed which points to the potential consolidation with periods of trending price action, especially with Core PPI data on deck. The market retains a bullish tilt as long as SPY holds above $600, with upside targets at $605 and $608. A break above $605 could lead to a push toward $610, especially if economic data continues to favor risk assets. However, a drop below $600 would put $596 and $592 in play, both key zones for maintaining the current structure. This is actionable intelligence: traders should favor long setups above $600 but be ready to reverse course if PPI disappoints or support fails to hold. Volatility is expected to rise, making it essential to stay nimble and trade with the trend.
Trading Strategy
With the VIX ticking up 1.83% to 17.26, volatility remains relatively low but is beginning to climb, raising the stakes for Thursday’s economic reports. Long trades remain favored above $600, with upside targets at $605 and $608. Consider tightening stops near these resistance levels to protect gains. Short trades can be initiated on failed breakouts above $605 or confirmed breakdowns below $600, targeting $596 and $592. Use smaller positions in this elevated volatility environment and avoid overexposure. Stop-losses should be kept tighter during choppy sessions but widened slightly if momentum builds post-data. As always, trade what you see—not what you hope for—and be ready to adapt to unexpected swings around key levels.
Model’s Projected Range
The model projects SPY’s maximum range for Thursday is between $595.25 and $607.50, with continued Call-side dominance in a narrowing band suggesting choppy trading on Thursday with intermittent trending moves. CPI data earlier in the day initially supported the market, as core inflation came in cooler than expected, pushing SPY to a premarket high of $605.39 before pulling back on China tariff news. Despite the retreat, SPY closed above $601, keeping the bullish narrative intact, which remains valid as long as SPY holds above $585. Momentum is beginning to slow, favoring a gradual grind higher unless a material external catalyst changes the current dynamic. A decisive close below $585 would meaningfully shift the short-term outlook to bearish. Key resistance levels are at $603, $605, and $608, while support is noted at $600, $596, and $592. SPY ended the session just below the lower bound of a steep, uncorrected bull channel from April, a rate of ascent that appears unsustainable and may require a redraw of the channel or signal the end of the rally if weakness continues. Above $605, resistance thickens toward $610, which may cap near-term upside, while below $596, support is building but remains thin under $590, making that a critical level to hold. Without a new catalyst, SPY may revert to the broader $575–$595 range that has dominated since May 13. If SPY remains above $600 on Thursday, a move toward $605 or even $610 becomes more likely, while a break below $600 could trigger a pullback toward $595 or $590, both pivotal for sustaining the current bullish structure. Since April, market direction has been closely tied to macroeconomic data, bond yields, inflation readings, tariff developments, and fiscal policy updates, a relationship expected to persist in the absence of major policy changes. Meanwhile, the VIX rose 1.83% to 17.26, still well below the 23 threshold that typically signals risk-off sentiment, though any uptick in volatility could reflect growing investor unease and raise the potential for price instability in response to negative surprises. Given the ongoing uncertainty, traders are advised to remain nimble and responsive to economic data and headline risk as the week progresses.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI is currently in a wide Ranging Market State, with SPY closing at MSI support. Extended targets only printed sporadically today as SPY fell on negative China tariff news. Overnight, the MSI rescaled lower into a ranging state, but by the open on favorable CPI data, the MSI rescaled to a bullish state which saw price jump to the days highs, breaking above $605. By the open however the MSI had rescaled lower to a very narrow bullish state without any extended targets indicating a waning bull trend. The MSI then rescaled lower to a ranging state which saw price bounce off MSI support. Another rescale higher to a narrow bullish state and that was the routine until 2 pm when China tariff news hit the wire and SPY fell with the MSI rescaling lower several times to a narrow bearish state, but one supported by extended targets. Into the close the MSI rescaled higher, remaining in a bearish state, recovering some of the declines but ending the day in a wide ranging state indicating a bit of confusion and wait and see market on Thursday. Currently, MSI support stands at $600.95 with resistance at $603.81.
Key Levels and Market Movements:
On Tuesday, we noted: “Developments from the White House, the LA riots, or ongoing China tariff discussions may also act as catalysts.” We also stated: “Upward momentum remains intact, and dips continue to be bought. As long as SPY holds above $600 on Wednesday, upside potential extends to $610.” Finally, we added: “Tactical shorts may be considered above $605.” Armed with this actionable context, we entered the day with a narrow-band, bullish MSI, as SPY had set up a textbook failed breakout in the premarket. While we would have taken a short trade at the open if price had been closer to the $605 level, we opted to wait for a pullback and subsequent rally into MSI resistance around 11 a.m. With a narrow-range MSI, no extended targets, and price stalling at MSI resistance at $605, we initiated a short position with a first target at the premarket level of $602.50. This target was reached with ease shortly after noon, prompting us to hold for a potential secondary move lower. While we usually move our stop to breakeven more quickly on counter-trend trades, the inability to hold above $605 increased our conviction that the session would ultimately resolve to the downside. Although a tradable double bottom formed at MSI support at $602, we did not participate, consistent with our policy of avoiding trades in a ranging MSI environment. SPY reversed sharply, and it briefly looked like we might be stopped out after only one target. However, when SPY again failed to reclaim $604 meaningfully, we reloaded on our short with the expectation of testing the $600 level. We took initial profits once more at MSI support at $602.50 and set our second target at $600, which was also a key MSI and a premarket support level. This target was hit without issue, and SPY ultimately printed a textbook failed breakdown at $599.75. At that point, we exited our short position but chose not to go long, as extended targets were printing and risk/reward had deteriorated. By 3 p.m., we were two-for-two on the day and shifted into profit protection mode. With strong gains in hand, we wrapped up our trading session. Once again, our success was the direct result of a clear, structured plan, disciplined execution, and the strategic application of the MSI for control, timing, and actionable levels. Integrated within our broader trading framework and model levels, the MSI continues to prove indispensable in delivering consistent performance.
Trading Strategy Based on MSI:
With PPI and Unemployment Claims on deck tomorrow, expect the market to trade lower overnight, potentially retesting the day’s lows before settling into a range ahead of these key reports. There remains a risk of external catalysts such as developments in China tariff policy or heightened tensions between Israel and Iran, impacting price action. When headlines hit the wire, trade what you see. Absent a major catalyst, SPY is likely to consolidate or flag slightly lower, building energy for a potential move back toward the $605 level. Upward momentum remains intact, and dips continue to be bought. As long as SPY holds above $600 on Thursday, upside potential extends to $610. However, a break below $600 could bring $595 into play. Failure to hold that level may trigger a deeper pullback toward $585 or lower, marking a critical inflection point that could shift control to the bears and reintroduce the $575–$595 range, an area where institutions have been actively hedged. Unless a meaningful breakdown occurs, the path of least resistance remains higher. A sustained move above $605 could open the door to new all-time highs. We continue to favor long setups, with key support extending down to $585. Tactical shorts may be considered above $605 or below $600, particularly if breakout attempts fail and the MSI begins to weaken. As long as SPY remains above $585, long positions remain favorable. Failed breakdowns continue to present high-quality long opportunities. Stay alert and responsive as these setups emerge. Avoid engaging during Ranging Market States and always align your strategy with the MSI. The MSI provides real-time insights into market control, momentum shifts, and actionable levels. When paired with our Pre-Market and Post-Market Reports, the MSI enhances execution precision and improves trade quality. If you haven’t yet integrated the MSI and model levels into your trading process, now is the time. Contact your representative to get started as these tools can significantly improve consistency and performance.
Dealer Positioning Analysis
Summary of Current Dealer Positioning:
Dealers are selling SPY $603 to $615 and higher strike Calls while buying $602 Calls in small quantities implying the belief that the market may attempt to recover on Thursday. The peak from this positioning on Thursday appears to be $605. To the downside, Dealers are buying $601 to $550 and lower strike Puts in a 2:1 ratio to the Calls they’re selling/buying. Dealer positioning has changed from bullish to neutral for Wednesday.
Looking Ahead to Friday:
Dealers are selling $603 to $620 and higher strike Calls while buying $602 Calls implying the belief that the market may continue to drift higher this week. The likely ceiling for the week is $610 with $605 offering major resistance. To the downside, Dealers are buying $601 to $505 and lower strike Puts in a 4:1 ratio to the Calls they’re selling/buying, reflecting a bearish outlook for the week. Dealer positioning has changed from slightly bearish to bearish. This is relatively new for the Dealers who haven’t changed their positioning in some time. This implies a concern at these levels that the bull trend may in fact be coming to an end, or at least face severe headwinds the rest of this week. 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
SPY held above key support at $600 on Wednesday, maintaining its bullish structure ahead of Thursday’s PPI release. Traders should continue favoring long entries above $600, targeting $605 and $608, with stops tightened as these resistance levels are approached. Short setups can be considered on failed breakouts above $605 or breakdowns below $600, with downside targets at $596 and $592. The VIX’s modest rise to 17.26 signals a slight increase in market tension, reinforcing the need for prudent risk management. Smaller position sizes are recommended during Thursday’s economic events to avoid overexposure. Be prepared for increased volatility and stay disciplined with stops. Review the premarket analysis posted before 9 AM ET for any overnight developments or model updates.
Good luck and good trading!
