Market Insights: Friday, July 11th, 2025

Market Overview

Markets pulled back Friday as a fresh round of tariff threats from President Trump rattled investors and sent stocks retreating from record highs. The S&P 500 declined 0.3% and the Nasdaq slipped 0.2%, both easing from Thursday’s all-time closes. The Dow was hit harder, shedding 0.6% and dropping over 250 points after Trump floated a 35% tariff on Canadian imports beginning August 1. He also hinted at sweeping tariffs of 15% to 20% on a broader range of trading partners, further fueling global trade tension. Still, some parts of the market remained upbeat. Nvidia reached another record high, and bitcoin surged past $118,000, continuing its powerful rally. Markets largely brushed off Trump’s threats, which have increasingly been met with skepticism given previous carveouts and delays. The White House later clarified that many Canadian goods would be exempt from the announced duties, softening the blow. Trump, meanwhile, continued to frame the tariffs as a net positive, citing Thursday’s market highs as evidence. JPMorgan’s Jamie Dimon, however, warned investors may be underestimating the risks. As traders weigh the potential economic fallout, attention is also shifting to upcoming earnings and key inflation data due next week.

SPY Performance

SPY slipped 0.36% on Friday to close at $623.56 after trading in a narrow range. The ETF opened at $622.78 and briefly pushed higher to $624.86 before fading late in the session. Volume came in at 60.02 million shares, slightly above average, as the market digested new tariff developments. Despite the red finish, SPY continues to hold near record levels, and price action remained orderly throughout the day. The modest decline reflects consolidation rather than a breakdown, as support levels held firm and volatility stayed in check.

Major Indices Performance

The Russell 2000 led to the downside with a sharp 1.30% decline, undercutting recent gains as small caps took the brunt of renewed trade concerns. The Dow followed with a 0.63% drop, giving back over 250 points amid weakness in industrials and financials. The Nasdaq fell 0.22%, weighed by profit-taking in tech names, while the S&P 500 slipped 0.3%, backing off its record close. Defensive sectors showed relative strength, while cyclical names bore the brunt of tariff fears. Despite the negative tone, market internals remain solid, with tech leadership intact and earnings season set to drive the next leg.

Notable Stock Movements

Tesla, Amazon, and Alphabet powered higher on Friday, each posting gains over 1.17%, with Tesla once again leading the Magnificent Seven. Meanwhile, Meta, Apple, and Netflix ended the day in the red, marking a mixed performance across the group. The action reflects continued rotation within mega-cap tech, though overall sentiment remains constructive. Nvidia extended its historic run with another record close, helping to anchor the bullish tone even as broader indices wavered.

Commodity and Cryptocurrency Updates

Crude oil bucked the equity trend with a strong 3.14% rally to close at $68.66, rebounding sharply after recent losses. While our model still sees a path toward $60 over the longer term, Friday’s move highlights the impact of shifting demand sentiment tied to geopolitical developments. Gold jumped 1.36% to $3,370, benefiting from safe-haven flows as trade tensions flared again. Bitcoin surged 3.84% to finish above $117,800, notching another record and continuing to draw capital as enthusiasm in risk assets broadens beyond equities.

Treasury Yield Information

The 10-year Treasury yield rose by 1.45% to settle at 4.42%, creeping closer to the key 4.5% threshold that could begin to pressure equities. Yields remain a focal point for traders watching inflation and Fed policy closely. A move above 4.8% would pose a serious risk to equity valuations, and any break beyond 5% could trigger a sharp correction exceeding 20%. For now, yields remain elevated but stable, allowing the bull trend to continue—though not without caution.

Previous Day’s Forecast Analysis

Thursday’s forecast projected SPY to trade between $622 and $631 with a bullish bias, emphasizing the potential for a grind higher supported by strong momentum and a Call-dominated options structure. Key support levels at $623, $620, and $615 were flagged as areas for potential long setups, while resistance was expected near $627, $630, and $635. The model called for buying dips near $623 or $620 and targeting upside moves toward $627 and $630. The strategy stressed flexibility, with a clear preference for long trades unless momentum failed near resistance or negative news disrupted market stability.

Market Performance vs. Forecast

SPY’s actual range on Friday closely followed the projected framework, trading from a low of $621.53 to a high of $624.86 before settling at $623.56. The ETF remained comfortably within the anticipated range, and the market respected key levels, particularly the $623 support zone which held firm throughout the session. The failure to break above $625 or test $627 signaled a consolidation day, as anticipated by the model. Long setups near $622 provided modest profit-taking opportunities, but a lack of follow-through at resistance led to muted action. The analysis once again provided a reliable roadmap for navigating the day’s price action.

Premarket Analysis Summary

In Friday’s premarket analysis posted at 7:17 AM, SPY was trading at $621.82 with a clearly defined bias level at $624.25. The model suggested a bearish tone below this level, with expectations for early weakness driven by overnight tariff headlines. Downside targets at $620 and $618 were highlighted as potential zones for reversal, while upside targets at $625 and $627.80 were set in case of a rally. Traders were advised to favor short entries below the bias level and to take profits near downside targets. A potential rally from the $622.30 zone was also noted, with the outlook calling for consolidation and recovery barring any sharp external catalysts.

Validation of the Analysis

The market followed the premarket playbook with precision. SPY opened near the bias level and quickly retreated to test support around $621.50, aligning with the lower range projection. A reversal from that area pushed the ETF back toward $624.86 before fading into the close. The $624.25 bias level acted as a ceiling, with the market unable to sustain momentum above it. Traders who acted on short rejections below the bias or long setups near the $621-$622 zone had multiple chances for quick gains. The premarket framework once again proved accurate, delivering clear direction and key levels that governed the day’s action.

Looking Ahead

Next week brings a flood of crucial economic data that could shake up market dynamics. CPI is scheduled for Tuesday, followed by PPI on Wednesday and key Retail Sales and Unemployment Claims on Thursday. These releases will be critical in shaping expectations for the Fed’s next move, particularly as inflation trends remain in focus. With no news scheduled for Monday, the market may drift in anticipation of these events, but traders should be ready for elevated volatility as the week unfolds.

Market Sentiment and Key Levels

SPY closed at $623.56, just above key support and below resistance, reinforcing a rangebound posture heading into Monday. The broader trend remains bullish, but with tariff threats re-emerging and yields rising, the bulls face headwinds. Resistance lies at $628, $630, $635, and $636, while support can be found at $623, $620, $618, and $615. If SPY holds above $620, we could see another push toward $630 and beyond. A break below $620, however, opens the door to a test of $615, with deeper support at $600 if momentum breaks down. Bulls still have the edge, but traders must remain nimble and alert for policy surprises.

Expected Price Action

Our AI model projects SPY to trade between $619.75 and $629.50 on Monday, suggesting a wider range with choppy action and occasional trends. The market bias leans cautiously bullish as long as SPY holds above $620, with upside targets at $628 and $630. A push through $630 could trigger a breakout toward $635 and $636. On the downside, a failure to hold $620 could lead to tests of $618 and $615. This is actionable intelligence: traders should prepare for either breakout continuation or a rejection-driven fade as the market awaits CPI and other key data.

Trading Strategy

Long trades remain favored above $620, with targets at $628 and $630. Should SPY break above $630, trailing stops may help capture a potential move toward $635 or $636. Short trades may develop on failed rallies near $628 or $630, especially if volume fades or if external news sours sentiment. A clean break below $620 could prompt a drop to $615 and potentially $600 if panic sets in. The VIX rose 3.93% to 16.40, signaling a slight uptick in risk and suggesting traders keep stops tight and sizing conservative. Expect some chop early in the week and remain flexible around major economic catalysts.

Model’s Projected Range

The model projects SPY’s maximum range for Monday between $619.75 and $629.50, with the Put side dominating within a narrow but gradually expanding 5-point range, suggesting choppy price action interspersed with occasional trending moves. Today’s session unfolded largely as expected, as buyers stepped in overnight just below $622, keeping prices hovering around the $623 level. The market fell at the open but found strong support at $621.50, which sparked a reversal to the day’s highs just shy of $625. SPY then drifted slightly lower into the close, ending the session virtually unchanged at $623.62, just below the psychological $625 level. The market remains in a complex, rangebound chop that will likely take time to resolve. Volume was average, and despite lingering tariff uncertainty, the broader uptrend remains intact as long as SPY holds above $585. Heading into Monday, a period of consolidation appears likely. Resistance is noted at $628, $630, $635, and $636, while support sits at $623, $620, $618, and $615. Bulls will aim to defend the $620 level to support another leg higher, while a break below $620 could trigger a quick pullback toward $618, with $615 also in play. While SPY is likely to continue grinding higher, any major catalyst could prompt a more decisive move. Downside risk appears limited unless SPY breaks below $600, which would open the door to a test of $585, though our model currently assigns a low probability to that scenario. In the absence of a catalyst, dips toward $620 are expected to be bought. Below $615, our stance turns bearish, with $600 as the next target. SPY closed just outside the lower edge of the redrawn bull channel from the April lows, with strong resistance between $628 and $636 that could cap further upside. A break below $610 would suggest more meaningful downside risk. The market remains highly sensitive to macroeconomic data, bond yields, inflation reports, tariff developments, and fiscal policy changes. Meanwhile, the VIX rose 3.93% to 16.40, maintaining a risk-on tone though caution remains warranted. At current levels, considering out-of-the-money Calls with 90-day expirations may be prudent as traders prepare for potential volatility ahead. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI is currently in a wide Ranging Market State, with SPY mid range. The MSI spent the bulk of the session in this state with only brief periods of both bullish and bearish trending states. There were no extended targets all day. The MSI rescaled lower overnight as tariff fears moved the markets with SPY falling to $621.50 before finding support and moving higher. But the session was choppy and tentative with the MSI advising caution given we do not favor trading while the MSI is in a Ranging Market State. This state implies confusion and as such its best to wait for it to resolve Sunday or Monday. We anticipate further consolidation as a result. Currently MSI support stands at $622.52 with resistance at $624.64.
Key Levels and Market Movements:
On Thursday, we wrote: “a day or two of consolidation appears likely,” and added, “caution is still warranted, yet in the absence of a clear macro catalyst, we expect the market to grind higher in a slow and orderly fashion.” We also noted, “Friday; otherwise, SPY may revisit $620, where buyers are expected to step in.” With SPY opening above $622, just below the key $623 support level, and with the MSI in a wide-ranging state, there was little to do until a clearer pattern emerged. Although we saw a textbook failed breakout at the open, we opted to stay on the sidelines, as we do not favor trading when MSI is in a Ranging Market State. The MSI then shifted to a bearish state, but with no extended downside targets and price retesting the overnight lows, we saw an opportunity. We entered long at $622 at 9:45 AM, setting our first target at the premarket level of $624.25. That target was reached shortly after 10:30 AM, at which point we set T2 at MSI resistance of $624.65. T2 was hit around noon. With a stop moved to breakeven, we again waited patiently as the MSI remained in a ranging state. We eyed another premarket level, $625, as a potential final exit, but price failed to reach it. Instead, it bounced off MSI resistance at our second target before returning to that area later in the session. Sensing limited further upside, we exited the trade at 3 PM and called it a weekend. One trade, one solid winner on a day with few opportunities, capping off a strong week. This outcome reflects the value of a disciplined daily plan, effective use of MSI for directional clarity and timing, and seamless integration of its levels into our broader model. MSI remains a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Monday brings no economic news, and with the market hovering near all-time highs while navigating tariff threats from the White House, further consolidation appears likely. Although the market will remain sensitive to tariff developments and related uncertainty, it continues to show a willingness to overlook these risks, increasing the likelihood of a continued rally. Caution remains warranted, yet in the absence of a clear macro catalyst, we expect the market to grind higher. Overnight, if bulls can hold $620, a push to $630 is possible on Monday. A failure to hold $620 could lead to a test of $618 and potentially $615, where we again expect buyers to step in. A decisive move below $615 would raise the odds of a deeper pullback toward $600. Until then, we anticipate that buyers will continue supporting dips, barring any unexpected negative headlines from the White House. If key levels hold, the market is likely to resume its steady climb toward $635. Currently, MSI remains in a Ranging Market State, suggesting consolidation and indecision. For bears to gain traction, a break below $600 would be necessary, while a close back above $625 would support the case for a move toward $635. We continue to favor long setups above $615, while short opportunities may emerge above $625 or on failed breakouts or breakdowns below $615, particularly when MSI indicates weakening conditions. As always, failed moves remain among the highest-probability setups. Stay nimble, avoid trades during Ranging Market States, and ensure full alignment with MSI. Providing real-time insights into market control, momentum shifts, and actionable levels, the MSI when integrated with our Pre-Market and Post-Market Reports continues to sharpen execution precision and elevate trade quality. If you haven’t yet integrated MSI and our model levels into your process, now is the time. Contact your representative to get started as these tools are designed to support consistency and enhance performance.

Dealer Positioning Analysis

Summary of Current Dealer Positioning:
Dealers are selling SPY $627 to $640 and higher strike Calls while also buying $624 to $626 Calls indicating the Dealers desire to participate in any rally on Monday. The likely ceiling for Monday is $630. To the downside, Dealers are buying $623 to $575 and lower strike Puts in a 3:1 ratio to the Calls they’re selling implying some concern that prices may move lower on Monday. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.   
Looking Ahead to Next Friday:
Dealers are selling SPY $630 to $650 and higher strike Calls while also buying $624 to $629 Calls indicating the Dealers desire to participate in any continuation of the rally next week. Dealers are positioned for SPY to move as high as $630 but not likely beyond this level. Dealers are no longer selling close to the money Puts. To the downside, Dealers are buying $623 to $555 and lower strike Puts in a 4:1 ratio to the Calls they’re selling/buying, reflecting a bearish outlook for next week. Dealer positioning has changed from slightly bearish/neutral to 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

SPY is once again hovering near resistance around $625, with mixed macro signals and a rising VIX. Traders should watch for long entries near $620 or lower with upside targets at $628 and $630. Shorts may emerge on failed rallies near $628 or $630, particularly if economic data disappoints or yields climb further. Keep stops tight around key levels and reduce size ahead of next week’s CPI and PPI data. Monitor any tariff-related headlines over the weekend that could reset sentiment at Monday’s open. Review the premarket analysis posted before 9 AM ET to stay aligned with the latest model updates and Dealer Positioning.

Good luck and good trading!