Market Insights: Monday, July 14th, 2025
Market Overview
Markets started the week on a positive note, with the Nasdaq climbing to another record high as investors largely brushed aside fresh tariff threats and focused on the coming wave of economic data and second-quarter earnings. Stocks managed to rally despite early jitters triggered by President Trump’s announcement over the weekend of 30% tariffs on goods from the EU and Mexico, effective August 1. Initial weakness faded as traders continued to bet that Trump’s threats will be softened through negotiations. Officials from both trading partners signaled a willingness to seek revised deals, keeping hope alive that the most damaging aspects of the new tariffs might be avoided.
The S&P 500 and Dow finished modestly higher, while the Nasdaq posted a 0.3% gain to secure another record close. Meanwhile, crypto markets saw a major early rally as Bitcoin surged past $123,000 before slipping back below $120,000 later in the day. The spike came as Congress kicked off “Crypto Week,” with the House reviewing three major bills tied to digital asset regulation. Equities tied to the crypto space also advanced early before cooling into the close. Meanwhile, Trump escalated geopolitical tensions by threatening 100% “secondary” tariffs on Russia and pledging additional weapons to Ukraine. Investors now turn their attention to Tuesday’s CPI report, a key release that could shape expectations for the Fed’s next interest rate move and clarify whether tariffs are feeding inflation. Big bank earnings also begin rolling in this week, starting with Wells Fargo and others on Tuesday.
SPY Performance
SPY posted a modest gain of 0.18% on Monday to close at $624.77, climbing slightly from Friday’s finish as buyers stepped in near support once again. The ETF opened at $623.18 and briefly climbed to $625.16 before fading into the close. Volume was notably light at just 48.81 million shares, well below average, reflecting caution ahead of Tuesday’s CPI report. Despite the muted action, SPY continues to hold near record levels, and the narrow trading range suggests ongoing consolidation. The market’s ability to stabilize after early weakness shows continued underlying strength.
Major Indices Performance
The Russell 2000 led the charge with a 0.62% gain as small caps rebounded sharply from last week’s tariff-driven dip. The Nasdaq followed with a 0.27% rise, closing at another all-time high on renewed tech strength. The Dow added 0.16%, while the S&P 500 inched up 0.1% to hold just below its record close. Sector action was mixed, with tech and consumer discretionary leading, while defensive sectors underperformed. Overall sentiment remained cautiously optimistic as traders awaited this week’s inflation data for direction. The market showed signs of resilience as recent macro headwinds were met with dip buying and rotational support.
Notable Stock Movements
The Magnificent Seven delivered another mixed session, with Netflix leading the group, gaining more than 1.35% to close at a new short-term high. Amazon, Alphabet, and Tesla also ended in the green, continuing their relative strength. Apple, Microsoft, and Nvidia slipped slightly, reflecting minor profit-taking after their recent runs. Nvidia’s pullback came after setting new highs last week, and some consolidation in the chip sector appears underway. Overall, mega-cap tech leadership remained intact, though market breadth continues to rotate as traders prepare for upcoming earnings reports.
Commodity and Cryptocurrency Updates
Crude oil fell 2.18% to settle at $66.96, reversing some of Friday’s gains. The decline supports our model’s longer-term view that crude remains on track to eventually test the $60 level amid shifting demand expectations and rising global supply. Gold pulled back 0.32% to $3,353 as investor appetite for safe havens eased slightly despite lingering trade and geopolitical tension. Bitcoin surged early in the session, breaking above $123,000 for the first time before ending the day up 0.70% near $119,900. The move was driven by optimism surrounding regulatory developments, though intraday volatility remained high.
Treasury Yield Information
The 10-year Treasury yield edged up 0.14% to close at 4.431%, inching closer to the pivotal 4.5% level that could pressure equity valuations. While yields have been stable in recent weeks, any sharp move higher, particularly beyond 4.8%, would pose a real threat to risk assets. A breach above 5% remains a critical line in the sand, historically triggering equity corrections of 20% or more. For now, yields continue to act as a barometer of inflation expectations and Fed policy outlook, and all eyes turn to Tuesday’s CPI report for clues on the next directional move.
Previous Day’s Forecast Analysis
Friday’s forecast projected a trading range for SPY between $619.75 and $629.50, highlighting a cautiously bullish bias as long as the ETF held above $620. Resistance levels at $628 and $630 were marked as key targets, with potential upside to $635 if momentum carried through. On the downside, a break below $620 was expected to open the door to a test of $618 or even $615. The strategy continued to favor long entries above $620 while identifying failed rallies near $628 or $630 as opportunities for short trades. The outlook stressed the potential for choppy price action leading into a critical week of economic data.
Market Performance vs. Forecast
SPY’s session followed the forecasted roadmap closely, staying well within the projected range and showing clear respect for the modeled levels. The ETF opened at $623.18 and slipped to a low of $621.80 before finding support, just above the crucial $620 threshold. From there, it rallied to a high of $625.16, nearing resistance but failing to break through. The close at $624.77 confirmed the model’s expectation for a grind higher, with buyers once again stepping in on dips. The anticipated consolidation played out as SPY respected both support and resistance levels without significant deviation, affirming the model’s reliability.
Premarket Analysis Summary
In Monday’s premarket analysis posted at 7:18 AM, SPY was trading at $621.68 with a defined bias level at $624. The model suggested a likely rally following early downside, with the area between $619.75 and $621.35 flagged as a probable reversal zone. Upside targets at $625 and $627.85 were highlighted, and a break above $625 was seen as a potential breakout setup toward higher resistance. The strategy leaned toward long entries from support zones, warning that any deep weakness would likely require an external catalyst. Short entries were suggested only from failed rallies near the bias level with limited downside targets.
Validation of the Analysis
Monday’s market action validated the premarket analysis in nearly textbook fashion. SPY traded down to $621.80 early in the session, just above the premarket support zone and quickly bounced back. The rally pushed through the bias level to reach $625.16 before fading slightly into the close. The bias level at $624 provided a pivot throughout the day, acting first as resistance and later as a magnet around which prices stabilized. Traders who entered long positions near the $621-$622 range were rewarded with clean upside movement toward first and second targets. The model once again provided highly actionable guidance.
Looking Ahead
Tuesday brings the much-anticipated CPI report, the first of several key data releases this week. The inflation reading is likely to have an outsized impact on market expectations for future Fed action. Depending on the print, we could see a sharp reaction in yields, tech stocks, and rate-sensitive sectors. With volatility already creeping higher, traders should be ready for fast-moving conditions and elevated volume. Wednesday brings PPI and Thursday follows with Retail Sales and Jobless Claims. These reports could solidify or challenge the market’s current trajectory.
Market Sentiment and Key Levels
SPY heads into Tuesday trading just under $625, holding above key support and inching toward overhead resistance. The broader trend remains bullish, though the recent tariff threats and rising VIX suggest mounting caution. Resistance now sits at $627, $630, $632, and $635, while support levels are pegged at $624, $622, $618, and $616. Bulls will try to defend $623 overnight to build momentum for a push through $627, while a break below $622 could spark a slide toward $618 or lower. With sentiment leaning positive but fragile, traders should stay alert for sudden shifts driven by CPI.
Expected Price Action
Our AI model projects SPY to trade between $623 and $629 on Tuesday, continuing the trend of relatively tight ranges interspersed with breakout potential. The market bias leans cautiously bullish above $623, with buyers likely to step in near that level. If SPY can clear $627, we expect a push toward $630 and potentially $632. A break through $630 could trigger a sustained move toward $635. Conversely, a failure to hold $623 puts $618 and $616 into play, with deeper support at $615. This is actionable intelligence: expect rangebound trading early, with breakout potential as traders digest CPI data.
Trading Strategy
Traders should remain flexible heading into Tuesday’s CPI-driven session. Long entries are favored above $620, targeting $627 and $630, with potential for further gains toward $632. If SPY clears $630 early, trailing stops may help capture a breakout toward $635. Short trades may develop from failed rallies near $627 or $630, especially if inflation data disappoints or yields spike. A clean drop below $622 could trigger a test of $618 and $616, and possibly $615. The VIX rose 4.76% to 17.18, confirming a rising risk environment and supporting the need for tight stops and smaller position sizes.
Model’s Projected Range
The model projects SPY’s maximum range for Tuesday between $619 and $630 with the Put side dominating within a narrow 5-point range, suggesting choppy price action interspersed with occasional trending moves. Today’s session once again saw dips being bought as expected, with buyers stepping in overnight to support the $621 level after a tariff-related drop. As with last week, the market quickly shrugged off the concern and reclaimed losses, ending the day slightly higher, just below the $625 level. SPY drifted modestly lower into the close after reaching the day’s highs, finishing the session nearly unchanged at $624.77. The market remains in complex, rangebound chop that will likely take time to resolve. Volume was average, and despite ongoing tariff uncertainty, the broader uptrend remains intact as long as SPY holds above $585. Heading into Tuesday’s premarket CPI release, traders should be ready to respond to what unfolds once the data is absorbed. In the absence of a major catalyst, continued consolidation appears likely. Resistance stands at $627, $630, $632, and $635, while support is found at $624, $622, $618, and $616. Bulls will aim to defend $623 overnight to support another leg higher, while a break below that level could trigger a quick pullback toward $618, with $616 also in play. While SPY is likely to continue grinding higher, any significant catalyst could prompt a more decisive move. Downside risk remains limited unless SPY breaks below $600, which would open the door to a test of $585, though our model currently assigns low probability to that outcome. Once again, in the absence of a catalyst, dips toward $620 are expected to be bought. Below $616, our stance turns bearish, with $610 as the next downside target. SPY closed just outside the lower edge of the redrawn bull channel from the April lows, with strong resistance expected between $627 and $635, which may cap further upside. The market remains highly sensitive to macroeconomic data, bond yields, inflation reports, tariff developments, and fiscal policy changes. Meanwhile, the VIX rose 4.76% to 17.18, maintaining a risk-on tone, though caution is still warranted given the VIX has climbed for two consecutive sessions. Last week we advised long books to consider buying out-of-the-money Calls with 90-day expirations, and we continue to recommend this hedge for those who have not yet acted. Preparing for potential volatility using this or a similar strategy remains prudent.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI is currently in a narrow Bullish Trending Market State, with SPY closing near the top of the range. The MSI spent the morning session in a wide, ranging state with prices chopping around until 10 am when MSI support held and price moved through the range with the MSI rescaling higher to a bullish state. A slight dip in the MSI and price stalled at $625. There were extended targets which printed during the afternoon session, ceasing after 3 pm which saw price pull back into the close. Overnight the MSI rescaled lower to a bearish state but only briefly printed extended targets. Tariff fears moved price lower with SPY falling to $621.14 before finding MSI support and moving higher, similar to the price action witnessed on Friday. The session started choppy but reestablished its trend mid-morning with SPY pressing toward all time highs. The current MSI state implies a slow and grinding continuation of the bull trend with periods of further consolidation. Currently MSI support stands at $623.95 with resistance at $624.90.
Key Levels and Market Movements:
On Friday, we wrote: “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.” We also noted, “Overnight, if bulls can hold $620, a push to $630 is possible on Monday,” and added, “we anticipate that buyers will continue supporting dips.” With SPY opening above $623 and the MSI in a ranging state, we waited for the setup outlined in Friday’s plan to materialize. That came at 9:42 AM, when SPY presented a less-than-perfect failed breakdown at $621.80, with the MSI only briefly dipping into a weak bearish state. We went long at $622.25 and set our first target at the premarket level of $624. Though it took time, SPY eventually reached this target late in the morning. We then set T2 at MSI resistance at $624.55, which was hit by 1 PM. With our stop moved to breakeven, we trailed the remaining 10% of the position to see how far price might run. After a less-than-perfect failed breakout at $625, an area of major resistance, we opted to exit the remainder of the trade and call it a day, all before 2 PM ET. It was a “one and done” kind of day in a slow, choppy tape with headline risk, but we were pleased with a strong start to the week. Once again, this outcome underscored the value of a disciplined daily plan, the MSI’s effectiveness in providing directional clarity and timing, and the seamless integration of MSI levels with our broader model. The MSI remains a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Tuesday brings CPI premarket, which could shape the day’s action. Be prepared to trade what you see and stay alert to any tariff-related threats from the White House. In the absence of such catalysts, a slow grind higher with periods of consolidation appears likely. The market continues to show a willingness to overlook these risks, increasing the likelihood of a continued rally. While caution remains warranted, we still expect the market to grind higher. Overnight, if bulls can hold $623, a push to $630 is possible on Tuesday. A failure to hold $623 could lead to a test of $620 and potentially $615, where we once again expect buyers to step in. A decisive move below $615 would increase 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 Bullish Trending Market State, suggesting continuation of the rally. For bears to gain traction, a break below $600 would be necessary, while a close back above $625 supports 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 $625 to $635 and higher strike Calls while also buying $628 Calls in small size, indicating the Dealers desire to participate in any rally that breaks above $628 on Tuesday. The likely ceiling for tomorrow is $630. To the downside, Dealers are buying $624 to $575 and lower strike Puts in a 3:1 ratio to the Calls they’re selling/buying implying some concern that prices may move lower on Tuesday. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.
Looking Ahead to Friday:
Dealers are selling SPY $627 to $650 and higher strike Calls while also buying $625 to $628 Calls indicating the Dealers desire to participate in any continuation of the rally this week. Dealers are positioned for SPY to move as high as $630 but not likely beyond this level. To the downside, Dealers are buying $624 to $555 and lower strike Puts in a 5:1 ratio to the Calls they’re selling/buying, reflecting a bearish outlook for the week. Dealer positioning is changed from bearish to bearish but increasingly so. 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 just below key resistance near $625, and traders should be prepared for sharp moves as CPI is released Tuesday morning. Long entries remain favored near $623 or below with upside targets at $627 and $630. Should CPI surprise to the upside, expect a potential breakout above $630 with targets extending toward $632 or $635. On the downside, if support at $623 fails, look for short entries targeting $618, $616, and potentially $615. With the VIX climbing to 17.18, the second consecutive daily gain, risk is rising. Keep positions smaller, stops tighter, and look for confirmation at major levels before entering trades. Monitor the premarket analysis posted before 9 AM ET to align with updated model levels and Dealer Positioning.
Good luck and good trading!
