Market Insights: Monday, June 23rd, 2025
Market Overview
Markets staged an impressive rebound on Monday as fears of an escalating conflict in the Middle East eased dramatically. Early in the day, sentiment was shaky after the U.S. confirmed airstrikes on Iranian nuclear sites over the weekend, prompting a retaliatory missile strike from Iran. But by midday, markets began to recover as Iran’s response appeared measured and symbolic, targeting an unoccupied U.S. base in Qatar without causing any casualties. President Trump praised Iran’s restraint, claiming they had likely “gotten it all out of their system” and even thanked them for the advance warning. He reiterated calls for peace talks, fueling investor optimism that tensions might now deescalate. Stocks, which opened lower on fears of an oil supply disruption via the Strait of Hormuz, reversed sharply as crude prices tumbled. Brent crude plunged 7%, while WTI dropped below $69 a barrel. The reversal helped equities surge, aided further by Fed Governor Michelle Bowman’s dovish remarks suggesting a potential rate cut as early as July. Tesla added fuel to the rally after launching its highly anticipated robotaxi service in Austin, spiking 8% on the day. With Fed Chair Powell set to testify Tuesday, traders are positioning for clues on policy direction. Monday’s session snapped a three-day losing streak and may have marked a critical sentiment shift if geopolitical tensions continue to cool.
SPY Performance
SPY rose 0.97% on Monday to close at $600.07, recovering from an open of $594.96 and holding firm above the $600 mark after testing intraday lows at $591.89. The ETF surged into the close, notching a high of $600.54 on average volume of 80.27 million shares. This strong performance helped SPY reclaim the top end of its recent trading range and move back into breakout territory. The sharp bounce from the $592–$595 zone reaffirmed it as a major support region, while Monday’s close above $600 signals bullish momentum is back in play heading into a high-impact week.
Major Indices Performance
The Russell 2000 led the charge Monday with a gain of 1.17%, followed by the Nasdaq rising 0.94% and the Dow up 0.89%. The S&P 500 climbed 0.97%, snapping a three-day losing streak. All major averages benefited from easing geopolitical fears after Iran’s limited response to U.S. military action and Trump’s unexpectedly diplomatic tone. This helped reverse early market losses triggered by weekend headlines. Oil’s collapse also reduced inflation worries, giving equities room to rally. Defensive sectors underperformed slightly as traders rotated back into cyclicals and growth, reflecting renewed risk appetite. Monday’s gains were broad-based and driven by a shift in sentiment toward possible de-escalation and more dovish Fed policy.
Notable Stock Movements
Tesla was the standout among the Magnificent Seven, jumping more than 8% after the official rollout of its robotaxi test program in Austin. CEO Elon Musk confirmed customers began riding Tesla Model Ys for a flat $4.20 fee, and social media buzz supported strong early participation. The broader group rallied solidly, with all members ending the day green except Amazon and Alphabet, which posted modest losses. Tesla’s performance underscored renewed investor enthusiasm for innovation and growth despite a turbulent macro backdrop. The strength in tech mirrored broader market optimism as easing geopolitical tensions and potential rate cuts encouraged risk-on positioning.
Commodity and Cryptocurrency Updates
Crude oil plummeted 8.88% to settle at $67.28, a sharp reversal driven by Iran’s restrained retaliation and hopes that a wider regional conflict may now be avoided. While our long-term model continues to forecast a drift toward $60, short-term risk remains skewed to the upside if hostilities reignite. Gold held steady, slipping just 0.04% to $3,384 as market anxiety briefly receded. Bitcoin jumped 4.55% to close above $103,600, continuing to consolidate at elevated levels. We maintain our view: Bitcoin remains a viable long-only trading vehicle between $83,000 and $77,000, with sharp downside risk emerging only if it breaks below $77,000.
Treasury Yield Information
The 10-year Treasury yield dipped 0.62% to close at 4.348%, adding support to the equity rally. Lower yields helped ease pressure on risk assets, signaling renewed confidence in the Fed’s potential to shift policy dovishly in response to recent economic and geopolitical developments. However, yields remain elevated, and a move above 4.5% could quickly reignite downside pressure. Traders continue to monitor the bond market closely as a key signal for risk appetite, particularly with Powell’s testimony ahead. For now, the dip in yields provides a window for bulls to push higher.
Previous Day’s Forecast Analysis
Friday’s newsletter called for a wide expected SPY range of $587 to $600, noting a Put-dominated environment and highlighting both downside pressure and breakout potential. The model identified $598 and $600 as resistance zones, with support clustered between $587 and $590. Actionable intelligence favored short trades on failed rallies near resistance and long trades on rebounds from key support levels. The strategy emphasized the importance of defending $590 to keep the bullish trend intact and warned of sharp reversals tied to geopolitical developments. With Powell’s testimony and inflation data ahead, volatility was expected to rise, requiring tight risk management and disciplined entries near critical levels.
Market Performance vs. Forecast
Monday’s session tracked closely with the forecast. SPY opened at $594.96, dipped to a low of $591.89, and surged to close at $600.07 ending just under the model’s upper range of $600. The projected trading band of $587 to $600 captured the full extent of the day’s movement, and both the $590 support and $600 resistance levels were tested precisely. The reversal near $592 provided an ideal long entry, as forecasted, with the push to $600 validating the model’s call for a bullish outcome if SPY reclaimed key levels. Traders following the plan had ample opportunity for profitable trades, particularly with long setups off the $591–$594 zone.
Premarket Analysis Summary
In Monday’s premarket analysis posted at 8:41 AM, SPY was trading at $594.49 with a key bias level set at $595.50. The outlook suggested a cautious stance beneath this level, favoring short entries near resistance and targeting lower support zones at $594, $591, and $587. The report noted that if downside pressure faded and SPY could reclaim the bias level, long entries toward $597.60 and $602 would become viable. Market tone was mixed, with traders advised to remain flexible and quick to take profits due to limited upside exuberance.
Validation of the Analysis
The premarket forecast proved highly accurate. SPY initially struggled below the $595.50 bias level but never broke below the $591–$592 support zone. When downside pressure eased, SPY surged through the bias level and met the first upside target of $597.60 before ultimately tagging $600.54. This action perfectly aligned with the analysis, which called for a rally if SPY regained strength above $595.50. Traders who followed the outlined plan had clear, actionable setups throughout the session. The precision of the premarket roadmap once again demonstrated its value for tactical trading.
Looking Ahead
Tuesday brings the first of two days of testimony from Fed Chair Jerome Powell, an event that could dramatically shift sentiment depending on the tone he strikes. Markets will be listening for clarity on the timing and conditions of potential rate cuts. With tensions in the Middle East still simmering but not escalating, attention turns back to monetary policy and inflation expectations. A dovish signal could push markets higher, while any suggestion of prolonged rate hikes may cap gains. Traders should brace for a volatile reaction and be prepared to adjust quickly.
Market Sentiment and Key Levels
SPY closed at $600.07, reclaiming a key psychological level and signaling a return to bullish control. Sentiment has shifted more constructive following Iran’s limited response and renewed Fed cut hopes. Support is now found at $598, $596, $594, and $590, with $590 still the line in the sand for bulls. Resistance stands at $601, $605, and $610. A break above $605 could open the door to new highs, while a move below $590 would again raise downside risks. With Powell’s testimony on deck, volatility could return swiftly. The bulls need to hold momentum through this critical week to confirm a breakout.
Expected Price Action
Our AI model projects SPY’s expected range for Tuesday between $591.75 and $604.75, with Call dominance suggesting upside pressure in a tightening band. This setup supports choppy trading with bursts of trending momentum. The market leans bullish, favoring long trades if SPY stays above $598. Key upside targets include $601 and $605, with $610 possible on strength. Should SPY lose $594, look for a retest of $590, then $587. Momentum favors bulls, but Powell’s testimony could shift the trajectory quickly. Stay nimble and trade around the model’s levels, especially during high-impact events.
Trading Strategy
With SPY closing above $600, traders should consider long setups on dips toward $598 and $596, targeting $601, $605, and potentially $610. Short trades can be considered on failed breakouts near $605, targeting $600 and $594. Use tight stops near key resistance, especially if Powell’s tone disappoints markets. The VIX declined 3.83% to 19.83, reflecting improved sentiment but still signaling cautious optimism. Position sizes should be adjusted accordingly. Avoid overexposure until Powell’s testimony is absorbed. Volatility remains a key risk factor this week.
Model’s Projected Range
The model projects SPY’s maximum expected range for Tuesday at $591.75 to $604.75, with the Call side dominating within a narrowing band suggesting choppy price action interspersed with periods of trend-driven movement. Today's session initially reflected mounting concerns over potential retaliation for U.S. involvement in the Iran conflict. However, these fears were swiftly eased after Iran stated it had launched an attack on an unoccupied base in Qatar and considered the matter closed. In response, the market surged higher, with oil prices tumbling more than 8%. This rally snapped a three-day selloff that had weighed on sentiment, and SPY ultimately closed at $600 signaling momentum toward new all-time highs. While geopolitical risks tied to the Middle East persist, the market appears, for now, to have moved on and may resume its bullish trajectory. We maintain a cautious stance until greater clarity emerges, though the broader bullish narrative remains intact. Technically, bulls remain in control as long as SPY holds above $585. For Tuesday, the $590 level is seen as a critical support zone; holding it could set the stage for another leg higher. A failure at this level would be an early warning, and a break below $585 could accelerate downside pressure. Absent a major external catalyst, our model suggests that dips are likely to be bought. Resistance is now seen at $601, $605, and $610, while support levels are noted at $598, $596, $594, and $590. Notably, SPY closed just above the lower boundary of the recently redrawn bull channel from the April lows. Resistance remains heavy between $600 and $605, but a breakout above $605 would likely propel the index toward new highs. Conversely, a break below $590 could open the door to deeper downside risks. Since April, market direction has closely followed macroeconomic data, bond yields, inflation trends, tariff developments, and fiscal policy cues, a pattern we expect to continue in the absence of a significant policy shift. Meanwhile, the VIX dropped 3.83% to 19.83. Though still below the 23 level typically associated with risk-off sentiment, the reading signals ongoing investor caution and the potential for rising volatility. In this environment, traders should stay nimble and closely monitor both economic data releases and evolving geopolitical developments in the days ahead.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI is currently in Bullish Trending Market State, with SPY closing above MSI resistance turned support. Extended targets printed into the close indicating the herd was participating in the afternoon rally. The MSI range is average which implies further price gains may follow on Tuesday. The MSI opened the day in a Bearish Trending Market State which quickly reverted to a wide ranging state and then to a narrow bullish state. Before noon SPY dipped lower and the MSI rescaled to a ranging state and then to a narrow bearish state which dipped below Friday’s lows. There SPY found major support and reversed hard pushing the MSI from a bearish state to a bullish state which saw extended targets emerge. Into the close SPY rallied to close just above the $600 level. Currently, MSI support stands at $599.02 and lower at $597.41.
Key Levels and Market Movements:
On Friday, we noted: “Should the U.S. deepen its involvement in the Middle East, expect a knee-jerk selloff in equities and a sharp spike in crude oil.” We also stated, “Barring such macro shocks, the broader bull trend remains intact as long as SPY holds above $585,” and finally, “On the upside, if SPY holds above $590 on Monday, a move toward $600 is still in play.” Armed with this outlook, we entered Monday after an eventful weekend marked by surprise attacks and pressure on oil. Strong PMI numbers in the premarket helped SPY push higher before the open. With the MSI in a bearish market state but lacking extended downside targets, we were prepared to go long, yet no setup offered enough edge to justify entry. Price surged, validating our bias, but we stayed on the sidelines. By 10 a.m., MSI had shifted into a narrow bullish state, and with few extended targets above, we opted to fade the rally as they stopped printing at $598 on a less-than-perfect failed breakout. We targeted MSI support at $596.50, which hit by 11 a.m. We considered reversing long, knowing SPY had a 70% chance to revisit MSI resistance, but opted to hold the short. When price rebounded toward our entry, we reloaded the short at $597.50, again targeting $596.50. This hit our $1 minimum goal, again before noon. With two quick scalps in hand, we shifted to profit protection mode and moved stops to breakeven due to the countertrend nature of the trades. SPY continued lower, and we set our second target at MSI support of $594.15, reached by 12:30 p.m. With 90% of the position secured, we trailed the remaining 10%, targeting $593, a premarket level. Price broke lower, reached $593, and we continued holding as momentum remained strong. However, SPY quickly found buyers at $592 and staged a textbook failed breakdown. With no extended targets below and a narrow MSI range, we reversed long, setting an initial target at MSI resistance at $594, which hit quickly. We then set T2 at the next MSI level of $596. SPY bounced but stayed within trend, and our wider stop allowed us to remain in the trade with 30% still active. News that Iran had concluded retaliation efforts sent SPY soaring, and we reached T2 by 1:30 p.m. With 10% left, we trailed our stop, anticipating a retest of the day’s highs. SPY broke morning highs and began printing extended targets. Holding our trailer, we watched price approach $599 and aimed for the $600 premarket level. Into the close, SPY tagged $600, where we exited just before the bell. A strong start to the week: three-for-three, driven by a structured plan, disciplined execution, and strategic use of MSI for directional control, timing, and actionable levels. Integrated with our broader framework and model levels, MSI continues to be an indispensable tool for consistent trading performance.
Trading Strategy Based on MSI:
A wave of economic data is on deck this week, carrying the potential to move markets. While Powell is the only scheduled speaker on Tuesday, the Middle East remains fluid, and several key reports are due later in the week. In this environment, the best advice for Tuesday is simple: trade what you see. Barring any macro shocks, the broader bull trend remains intact as long as SPY holds above $585. A test and failure of $590 would be an early warning that downside pressure is building. Despite weekend headlines about a U.S. attack on Iran, the market couldn’t break below $592, evidence that bulls remain firmly in control. The push back toward $600 reinforces this strength. A close above $600 would likely signal another leg higher. While external catalysts like tariff headlines remain credible threats to sentiment, the market quickly left behind the critical $575–$595 range that had contained much of the action since May. With that consolidation phase behind us, expectations tilt toward higher prices and a continued bull trend targeting all-time highs. On the upside, if SPY holds above $590 on Tuesday, a highly probable scenario, a move toward $605 is in play. Conversely, a break below $590 could trigger a deeper pullback toward $585, a key inflection point that could hand short-term control back to the bears. Absent a meaningful breakdown, however, the path of least resistance continues to point higher. A sustained move above $605 would likely open the door to new all-time highs. We continue to favor long setups above $590 and tactical shorts above $603. Shorts may also be considered on failed breakouts or failed holds below $590, especially when MSI indicates weakening conditions. As always, failed breakouts and breakdowns offer high-quality opportunities. Stay alert and flexible as these setups evolve. Avoid trading during Ranging Market States and always align your strategy with MSI. MSI offers real-time insights into market control, momentum shifts, and actionable levels. Integrated with our Pre-Market and Post-Market Reports, MSI sharpens execution and enhances trade quality. If you haven’t yet incorporated MSI and model levels into your workflow, now is the time. Contact your representative to get started as these tools are designed to support consistency and elevate performance.
Dealer Positioning Analysis
Summary of Current Dealer Positioning:
Dealers are selling SPY $601 to $612 and higher strike Calls while also selling $598 to $600 Puts indicating the Dealers belief that prices will continue to rise on Tuesday. Dealers do not sell close to the money Puts unless they are convinced the market will move higher. To the downside, Dealers are buying $597 to $550 and lower strike Puts in a 2:1 ratio to the Calls/Puts they’re selling/buying implying little concern that prices may move lower on Tuesday. Dealer positioning is unchanged from neutral to neutral.
Looking Ahead to Friday:
Dealers are selling SPY $607 to $615 and higher strike Calls while buying $601 to $606 Calls, indicating the Dealers belief that the market is likely to rally this week and if it does, they want to participate in any upside. The likely ceiling for the week is currently $608. To the downside, Dealers are buying $600 to $505 and lower strike Puts in a 3:1 ratio to the Calls they’re selling/buying, reflecting a slightly bearish/neutral outlook for this week. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral. 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 reclaiming the $600 level, bullish momentum may continue if Powell’s testimony does not disappoint. Traders should look for long opportunities on pullbacks to $598 or $596 with upside targets at $601 and $605. Short trades can be explored on failed rallies near $603, with downside targets of $600 and $594. With the VIX at 19.83, the market reflects a cautious but not fearful tone. Maintain smaller position sizes and keep stops tight around key levels. The tone could shift rapidly with Powell’s comments, so flexibility remains essential. Review the premarket analysis posted before 9 AM ET for any overnight shifts in the model’s outlook or changes in Dealer Positioning.
Good luck and good trading!
