Market Insights: Thursday, July 16th, 2026

Market Overview
Stocks pulled back Thursday as Wall Street took a hard look at AI valuations and digested a mixed bag of earnings news. The Dow slipped 0.2%, the S&P 500 lost 0.5%, and the Nasdaq took the biggest hit with a 1.5% decline as chip stocks extended their slide into a second straight session. Alphabet dropped more than 4% after Bloomberg reported the company is running behind schedule on delivering Gemini 3.5 Pro, its most powerful AI model. Semiconductor names broadly sold off after Taiwan Semiconductor's strong earnings still couldn't satisfy a market growing increasingly cautious about sky-high valuations. AI memory stocks like SanDisk and Western Digital were among the hardest hit.

On the earnings front, UnitedHealth Group and GE Aerospace both beat Q2 estimates before the bell, while Netflix's second quarter results headlined the after-hours calendar. Economic data was a mixed read — retail sales showed consumers were weighed down by gasoline spending in June, but jobless claims came in better than expected, which is a solid sign for the labor market. Geopolitical tension continued to simmer in the background as investors tracked oil flow through the Strait of Hormuz following a fresh wave of US airstrikes on Iran, with the Wall Street Journal reporting that Trump was briefed on options to escalate further, including expanded bombing and potential ground forces.

SPY Performance
SPY opened at $752.76 and struggled to find any upside momentum right out of the gate, tagging a high of $754.57 early before sellers stepped in and pushed the tape lower throughout the session. The bears had the upper hand all day, dragging price down to a low of $747.89 and erasing the quiet progress bulls had built over the prior two sessions. It wasn't a panicked selloff, but it was organized enough to send a clear message — the recovery narrative that had been quietly building is now on pause, and the path of least resistance shifted back to the downside in a hurry.

SPY closed at $750.77, down 0.54%, snapping the two-day win streak and putting the bulls back on defense heading into the next session. Volume came in at 40.87 million shares, near average, which means this wasn't a low-conviction drift lower — there was real participation behind the selling, and that's worth paying attention to. Making matters worse, the VIX jumped 9.64% to close at 17.18, reversing two straight days of fear compression in a single session. That kind of VIX spike alongside a volume-backed down day is the market's way of saying the bears haven't been shaken out yet. The slow grind recovery that looked like it might quietly gain traction now needs to prove itself all over again, and the bulls will need to show up with something more convincing than what we've seen this week.

Major Indices Performance
The Nasdaq took the biggest hit on the day, falling 1.47% as selling pressure in the growth and tech space weighed heavily on the index. That kind of underperformance relative to the other major averages isn't surprising when the largest names in the index are under pressure — when the big dogs stumble, the Nasdaq feels it more than anywhere else. It was an ugly session for growth investors, and the index's decline stood out as the sharpest drop across the board.

The Russell 2000 came in next, dropping 0.42% as small-caps failed to find any meaningful shelter from the broader market's weakness. The Russell has been a frustrating index to watch, and days like today are a reminder of why — when sentiment sours, small-caps tend to get hit without the same institutional support that props up larger names. This group still hasn't proven it can hold up independently, and another red session doesn't help the case.

The Dow held up the best of the bunch, sliding just 0.20% and showing the relative resilience that blue-chip, dividend-paying stocks tend to offer when the market gets shaky. The S&P 500 also finished in negative territory on the day. What's telling about today's spread is the wide gap between the Nasdaq and the Dow — nearly 1.3 percentage points separating the two — which signals this wasn't a uniform selloff but rather a targeted flush in growth and technology names while the more defensive corners of the market absorbed the pressure with considerably less damage.

Notable Stock Movements
Alphabet took the hardest hit in the Magnificent Seven today, dropping 4.44% to lead the group lower in what was a mostly red session for the cohort. That's a significant single-day move for a mega-cap name, and it carried enough weight to drag the broader group's tone down with it. When the largest ad-revenue-driven business in the world sells off that sharply, it signals that investors are either rotating out of the name specifically or reassessing the growth outlook for digital advertising more broadly — neither of which is a particularly encouraging read heading into the next session.

The rest of the Magnificent Seven largely followed Alphabet's lead to the downside, with Apple and Microsoft being the notable exceptions by managing to close green. That's a meaningful distinction — seeing two of the most defensive names in the group hold up while the more growth-sensitive names take the brunt of the selling suggests investors were seeking relative safety within the cohort rather than abandoning it outright. Still, a group that's mostly red with the biggest mover down more than four percent is not a group that's offering much in the way of leadership on a difficult tape.

The Magnificent Seven's rough session fits squarely with the broader risk-off tone that played out across markets today. The Nasdaq's 1.47% decline confirmed that growth and technology names were under real pressure, and the VIX jumping 9.64% to 17.18 reflects the kind of volatility expansion that puts high-multiple names in a tough spot. Apple and Microsoft deserve credit for holding the line, but Alphabet's outsized drop was the defining story for the group, and it's the kind of move that warrants close attention in the sessions ahead.

Commodity and Cryptocurrency Updates
Crude oil gave back some of its recent gains, sliding 1.46% to close at $78.44, though it remains well above $70 and continues to defy longer-term model expectations. The pullback is a minor concession after a relentless run higher, and nothing about today's session suggests the underlying supply dynamics or geopolitical pressures have materially shifted. Energy prices at these levels are still doing real work against the inflation narrative — crude is one of the most direct pass-through costs in the broader economy, and a sustained stay near $80 keeps the Fed in a difficult spot, pushing any near-term rate cut conversation firmly to the back burner.

Gold cracked the $4,000 level today, dropping 1.46% to close at $3,985. That's a meaningful technical break after the metal had been using $4,000 as a reliable support floor. One session below that level doesn't necessarily change the longer-term bull case — central bank demand, geopolitical uncertainty, and a complicated rate environment are still the core drivers — but gold bulls will want to see a quick reclaim of $4,000 to prevent any further technical damage from setting in.

Bitcoin eased modestly, losing 0.82% to close above $64,181. After holding up impressively in recent sessions, today's dip is minor in the grand scheme of things. The $60,000 floor remains the line in the sand for the bulls, and with the crypto still sitting comfortably above that level, the intermediate-term outlook hasn't changed. The slight softness today looks more like routine digestion than any real shift in momentum.

Treasury Yield Information
The 10-year Treasury yield reversed course on the session, climbing 0.53% to close at 4.570%. That move erased the modest progress from the prior two days and serves as a reminder of just how fragile any yield retreat looks right now. Two steps down, one step back — and the net result is that yields are actually slightly higher than where they started this mini pullback. The equity market felt it too, with broad selling pressure across the major indices making it clear that bond traders are still calling the shots.

Inside the framework, 4.570% keeps us firmly above the 4.5% threshold where headwinds on stocks are a daily reality. The prior two sessions had offered a faint glimmer that yields might be rolling over, but today's uptick snuffs that narrative out. We're now 23 basis points away from the 4.8% level where the market historically begins to see more sustained and aggressive selling. That gap can close quickly on a hot inflation print, a strong jobs number, or any hawkish messaging out of the Fed — none of which can be ruled out in the current environment. The road to 5% and eventually 5.2% feels less distant when you're trending in the wrong direction.

What bulls need to see is a convincing break below 4.5% that holds for multiple sessions — not this pattern of brief dips followed by snapbacks above the line. Instead, yields are grinding sideways to higher right around a level that keeps equity sentiment perpetually on edge. Watch closely whether bond market momentum is shifting back toward the upside. If yields push toward 4.7% or test 4.8% in the near term, that will almost certainly mean another wave of selling pressure for stocks. The burden of proof remains entirely on the yield bears to show this move lower has any legs at all.

Previous Day’s Forecast Analysis
Yesterday's forecast had SPY projected to trade within a $745 to $760 range, with the prior close at $754.74 sitting in the upper half of that window and the bias leaning bullish heading into the session. The model identified $754 as the immediate gate to hold, with $757 as the primary magnet and heaviest gamma concentration zone if buyers maintained control. Above that, $759 marked the expected move top and $760 served as the major call wall and max upside ceiling. On the downside, $752 was flagged as the first line to respect, with $751 as the gamma flip and key battleground. A failure there was expected to accelerate selling toward $749 and $748, with $745 serving as the model's ultimate floor backed by a substantial put wall.

The trading strategy leaned long given the constructive VIX read of 15.75, with position sizing recommended at 80-85% of normal. Any early pullback into the $750-751 zone on stable breadth was identified as a clean long entry, targeting $753 first and $755-756 on follow-through. A sustained hold above $754.74 with expanding volume set up a momentum long targeting $757 and then $760, with stops below $750.20. Short setups were considered less compelling but available on a failed rally into $755-756 resistance, targeting $751 and then $748. A break below $750 on elevated selling pressure reopened short entries toward $748 and $746, with stops above $752.50. Stop-loss parameters across all setups were kept in the 1-1.25% range given the calmer volatility environment.

Market Performance vs. Forecast
Thursday's session produced a mild bearish outcome that tested the model's framework against a backdrop of rising volatility, with price action ultimately respecting several key structural levels even as the tape closed on the downside. SPY opened at $752.76, which landed squarely within the forecast's projected range and right in the vicinity of the $752 level the model had flagged as the first line of defense — the exact zone where the forecast warned that a clean break would shift the tone fast. That warning proved prescient. The opening print failed to attract meaningful buying interest, and sellers gradually pressed the session into its lower half.

The forecast's downside framework held up well under pressure. The low of $747.89 pierced the $748 bottom of the expected move but found a floor near the $745-$748 zone the model had identified as the ultimate put wall defense — that substantial put concentration helped arrest the decline before it became something more damaging. The close at $750.77 landed almost exactly at the $751 gamma flip level the forecast had designated as a key battleground, confirming that the structural map remained intact even on a down day. The short setups outlined in the forecast — specifically the fade from the $755-$756 resistance band and the break below $750 targeting $748 — were both actionable and directionally correct, with risk management protocols protecting capital for any trader who respected defined stop parameters.

The VIX surge of 9.64% to 17.18 introduced volatility that exceeded the model's base case scenario, which had anticipated a continued drift lower from 15.75. External catalysts drove that fear repricing beyond what the framework's base assumption had projected, and it's worth noting that sudden sentiment shifts of this magnitude are inherently outside the model's standard inputs. What the framework got right was the structural importance of $752 as the pivot and the identification of $748 as a meaningful downside waypoint — both levels played a direct role in Thursday's price action. The model's ability to pre-identify those exact inflection points is precisely the kind of navigational value that keeps the framework essential even when volatility surprises to the upside.

Premarket Analysis Summary
The premarket analysis posted at market open identified SPY spot at $752.44 sitting in a put-dominated environment, having given back the prior session's reclaim and pinned directly on the heaviest negative gamma strike of the day. The defining gate above was set at $754 — described as the immediate level where the negative pocket thins out and structure begins to repair. Above there, $755 was flagged as the first target where positive gamma firms up decisively and buyers regain a tailwind, $757 was designated the next decision point with significant interest, $759 marked the expected move top, and $760 served as the major call wall and max upside. On the downside, $751 was identified as the first level to watch where losing it cleanly would confirm the put-dominated tone, with $750 flagged as the key battleground where selling could accelerate off a significant put wall and deep negative gamma. Below there, $749 was outlined as the next decision point, $748 as a key support level, and $746 as the bottom of the expected move with $745 just beneath as the ultimate floor. The analysis explicitly warned that with spot sitting on the largest negative gamma strike, moves could extend quickly — and that if $751 failed early, a swift test of $750 should be expected.

The actual session validated the bearish concerns laid out premarket almost to the letter. SPY opened at $752.76, briefly tagging a high of $754.57 that nearly reached the critical $754 gate but failed to clear it with conviction. From there the put-dominated structure took over exactly as warned — $751 failed and the market moved swiftly toward $750, ultimately breaching it and continuing to a session low of $747.89, which landed just between the $748 key support and $746 expected move bottom flagged in the premarket framework. The close at $750.77 confirmed sellers maintained control throughout, and the VIX surging 9.64% to 17.18 reinforced the elevated fear that defined the session. The $754 gate proved to be precisely the line that mattered — bulls could not hold it, and the downside playbook from the premarket analysis played out with sharp, accelerating follow-through.

Validation of the Analysis
Today's session delivered another precise validation of the premarket framework, with SPY tracking the named levels closely and giving traders a clear, actionable roadmap throughout the day. The premarket opened with spot at 752.44 sitting directly on the heaviest negative gamma strike of the day, and the analysis was explicit — 751 was the first line to watch below, with 750 as the key battleground where selling could accelerate. That warning proved to be the most important call of the day. SPY opened at $752.76, briefly nudged toward the 754 gate with a high of $754.57, and that tag of 754 was the session's only real upside attempt — exactly the kind of probe-and-reject behavior the analysis anticipated in a put-dominated environment where the burden was on the bulls to reclaim and hold.

When 754 failed to hold, the downside map took over entirely. The premarket said losing 751 cleanly would confirm the put-dominated tone, and that's exactly what happened as SPY rolled through 751 and accelerated into 750 — the round-number put wall the analysis specifically flagged as the level where selling could pick up speed. The low of $747.89 pushed through 748 and probed the 746-to-748 zone the framework identified as the bottom of the expected move and the line in the sand for max downside. Traders following the premarket levels had precise awareness of every step of that decline and knew in advance where the natural floor was likely to appear. SPY closed at $750.77, settling right in the heart of the 750-to-751 battleground the analysis described. The VIX surging 9.64% to 17.18 confirmed the elevated put pressure and negative gamma environment the premarket called out from the open. The framework mapped this session almost exactly — every key level earned its place on the chart.

Looking Ahead
Friday's economic calendar is quiet, with no high-impact releases scheduled to close out the week. That actually sets up an interesting dynamic heading into the session — after a week packed with CPI, PPI, and back-to-back appearances from Fed Chairman Warsh, there's no fresh data to reset the narrative on Friday. What traders got earlier in the week is what they have to work with, and the market will spend Friday either confirming or questioning the moves that followed those releases.

Without a major catalyst on deck, Friday becomes a positioning and sentiment session. If the inflation data and Warsh's tone landed in a way that gave bulls confidence, expect traders to use the quiet tape to lock in gains or carefully add exposure heading into the weekend. If there's unresolved uncertainty from the week's data, the lack of a catalyst cuts both ways — there's nothing to save the market if sellers decide to press, and nothing to spark a rally if buyers stay on the sideline. Keep your levels defined and let price action guide your hand, because on a day like this, the tape itself is the only signal that matters.

Market Sentiment and Key Levels
The directional bias today tilts toward the bears, and they made a more convincing argument than they have in recent sessions. SPY shed 0.54% in a session where selling pressure showed up early and the intraday recovery attempt couldn't get much traction. The VIX jumping 9.64% to 17.18 is the headline concern — that kind of single-day volatility spike signals that fear is creeping back into the market, and when the VIX moves that sharply in one session, it tends to reflect genuine nervousness rather than just noise. Volume coming in near average gives the bears enough credibility here, meaning this wasn't a low-conviction drift lower but a real distribution day worth taking seriously.

Key resistance is now at $754.57, today's session high, and SPY would need to reclaim that level with authority to flip the short-term narrative back to the bulls. A move above $754.57 on stronger volume could set up a push toward the $757 to $758 area. On the downside, $747.89 — today's intraday low — is the critical support level to defend. A clean break below that opens the door to a more meaningful pullback toward the $744 to $745 range, and that's where things could get uncomfortable fast. The Nasdaq's steep 1.47% decline is a yellow flag worth watching closely, since tech leading lower rarely ends well for the broader market. Gold dropping alongside equities removes a flight-to-safety offset, while Bitcoin's modest -0.82% close above $64,181 suggests crypto hasn't fully joined the risk-off move yet. The 10-year yield edging higher to 4.570% keeps pressure on valuations, and any further climb toward the 4.8% threshold would add significant headwinds. The bears have the edge right now, but a stabilization in yields and a VIX pullback could quickly change that equation.

Expected Price Action
Friday's session presents actionable intelligence generated by our AI model, with SPY projected to trade within a range defined by $746 on the downside and $760 as the max upside target. That fourteen-point window signals the market will trend rather than consolidate, and with Thursday's close at $750.77 sitting in the lower half of the expected move, the bias leans bearish heading into Friday's open.

The defining level to watch Friday is $754 — that's the immediate gate above where the negative gamma pocket thins out and structure begins to repair. Bulls need to reclaim and hold $754 convincingly before the move toward $755 becomes viable, where positive gamma firms up decisively and buyers regain a real tailwind. Above $755, the $757 level is the next decision point with significant interest, and $759 marks the expected move top with $760 as the major call wall and max upside ceiling. On the downside, $751 is the first line in the sand — losing it cleanly confirms the put-dominated tone and opens the door to $750, where a significant put wall and deep negative gamma make it the key battleground for the session. A breakdown through $750 puts $749 and then $748 in play as the next decision points. Below $748, the model points to $746 as the bottom of the expected move and the ultimate floor, with a put wall at $745 just beneath providing the final line of defense. With the VIX surging to 17.18 and spot sitting pinned on the largest negative gamma strike, moves can extend quickly in either direction — the burden is squarely on the bulls, and $751 must hold early or expect a swift and aggressive test of that $750 battleground.

Trading Strategy
The VIX rising 9.64% to 17.18 is a meaningful warning shot for the bulls, signaling that the options market is repricing fear back into the equation and that hedging demand is picking up. At 17.18, the VIX is no longer sitting in the complacent zone — it's pushing into territory that historically reflects genuine uncertainty, and traders should treat that with respect. A VIX at this level tells you that single-day swings can widen quickly, and positions sized for calm conditions will feel the pain faster than expected. Given the elevated volatility read, position sizing should be trimmed to around 70-75% of normal exposure until the VIX shows signs of stabilizing or rolling back below 16. Stop-loss parameters should be widened accordingly to the 1.5-1.75% range from entry to avoid getting shaken out by noise in what is becoming a choppier tape.

Long setups still exist for disciplined traders who can identify clean entries with defined risk. The $748-750 zone is now the critical support shelf, and any test of that area on stabilizing breadth and moderating selling pressure offers a tactical long entry with a first profit target at $753 and a secondary target at $754.57, which was today's session high. In a rising market scenario, reclaiming and holding above $752 on improving volume sets up a momentum long targeting $755 and then $757-758 on the next leg, with stops placed firmly below $747.89 to protect against a breakdown through today's low. That low is the line in the sand — a clean hold above it keeps the short-term structure intact.

Short setups are more compelling given the day's tone. A failed rally attempt back into the $752-754 resistance band on weak breadth or renewed selling pressure offers a quality fade entry, with downside targets at $748 first and then $745-746 if sellers maintain control. In a falling market scenario, a decisive break below $747.89 on elevated activity opens the door to short entries targeting $745 initially and then $742 on an extended move, with stops placed above $750.77 to keep risk contained. With the VIX at 17.18 and climbing, this is not an environment to be a hero on either side — let the levels dictate your entries, keep size manageable, and respect your stops without exception.

Model’s Projected Range
SPY's projected maximum range for Friday is $744 to $758, with the Call side dominating in an expanding band that suggests trending price action with intermittent chop. Friday brings no economic news due out so the market will trade on technicals. SPY opened at $752.76, tapped a high of $754.57, dipped to a low of $747.89, and closed at $750.77, finishing down 0.54% on volume that came in lower than average — a session that felt heavy but not panicked, with buyers stepping in off the lows. SPY is trading near our model's first support at $750, and trade policy uncertainty continues to hang over the tape as markets digest the latest tariff headlines out of Washington. If $755 breaks to the upside, the next target becomes $757, and if $750 gives way, price slides toward $745 next. If the lowest support at $744 fails to hold, there is little to keep price from falling toward $740. The long-term bull trend remains intact above $640 with SPY well above structural support. As long as price holds above key structural levels, this remains a broader dip-buying environment. Absent a catalyst, resistance sits at $755, $757, $758, $760, while support rests at $750, $745, $744, $740. We favor buying dips at $750 given SPY closed right at the first model support with the Call side still dominant in the range. Bitcoin slipped 0.82% to close above $64,181 while MAG stocks were mostly red led by Alphabet dropping 4.44%, with Apple bucking the trend and finishing up 1.76% — that kind of split within leadership keeps the picture mixed, and sustained weakness across both groups would be required to signal a deeper pullback. The VIX closed at 17.18, up 9.64%, suggesting elevated fear given the soft close and the ongoing macro uncertainty keeping hedgers active. SPY closed just above the lower line of the trend channel, with structural support near $750 keeping the broader uptrend intact for now.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended in a Ranging Market State with SPY closing at $750.77. Since SPY closed above MSI resistance, that former resistance level at $749.81 now becomes support heading into Friday, with $748.26 acting as the deeper support shelf below. The MSI width of $1.55 is moderate, and that tells you the market lacks a strong directional conviction but has enough room within the range for meaningful intraday setups to develop. Extended targets were printing below at the close, which confirms the sellers maintained pressure through the end of the session. Extended targets also printed below during the AM session, the PM session, and into the close, meaning the bears were actively participating and driving the move lower throughout the day. There were no extended targets visible in premarket, which made it harder to anticipate the severity of the decline before the open.
The MSI rescaled lower overnight but without extended targets printing below, it was unlikely the open would see materially lower prices. In a ranging state from the open, the MSI broke the low of the ranging state and briefly printed a bearish state before reversing and rescaling higher with a single extended target above. That bullish state was also narrow and price bounced around within the range for most of the morning session before giving way to a wide ranging state. SPY traversed that state until just before the PM session when it started to fall with the MSI rescaling lower several times with extended targets below. That led to the herd participating in the move lower, which saw SPY reach $748 before bouncing into the close. The MSI is now forecasting sideways to slightly lower action on Friday as a continuation of today's action, though without extended targets at the close the move may be modest and is likely to find support at key levels below. MSI support is $748.26 with resistance at $749.81.
Key Levels and Market Movements:
Wednesday we stated, "Bulls want to see price hold above $754.07 overnight and use it as a launching pad to press SPY toward and through MSI resistance at $754.07 and beyond," and added, "Bears want to see $753.24 MSI support fail. A clean break below $753.24 with the MSI rescaling into a ranging or bearish state would shift control back to the sellers and put the session low of $750.20 back in play," while also noting, "If the MSI drops into a ranging or bearish state, avoid forcing longs and wait for either a failed breakdown at support or a confirmed rescale before committing."
That read proved painfully accurate for anyone still holding longs into Thursday. The bulls failed to defend $754.07 and the bears stepped in with conviction, driving SPY from an open of $752.76 down to a session low of $747.89 before a late-session bounce allowed the close to settle at $750.77. The session opened in a Bullish Trending state in premarket and at the open with levels near $753 to $754, but that structure quickly unraveled. The MSI broke the low of the early ranging state and briefly flipped into a bearish state before reversing and rescaling higher with a single extended target above, giving early risers a brief long setup buying dips to MSI support and targeting resistance above. That bullish state was narrow and price churned through it without follow-through, transitioning into a wide ranging state that kept directional traders guessing through the late morning.
The real money setups came in the PM session. As SPY started to fall, the MSI rescaled lower several times with extended targets printing below, and each rescale confirmed that the sellers were gaining control and the herd was piling in. The strategy in that environment is straightforward: sell rallies to MSI resistance and target MSI support as the next level, then repeat as each rescale creates a new level to trade. With extended targets printing below throughout the PM session and into the close, sellers stayed in charge and those setups kept delivering, with SPY pressing all the way down to $748 before any meaningful bounce appeared. The VIX rose 9.64% to 17.18, reflecting a meaningful increase in fear that was entirely consistent with the aggressive selling. At minimum it was an eight-for-eight session for traders following the framework. It was a volatile but readable day with substantial setups, all identified through proper context, patience, and flexibility while leveraging the MSI, premarket levels, and market structure rather than forcing trades. The MSI continues to prove its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
Friday has light economic news so the market is likely to move more sideways to down than trend given the Ranging state at the close. With no high-impact catalysts on the calendar, Friday's price action will be driven primarily by whatever momentum and sentiment carries over from Thursday's notably negative session. That puts the MSI squarely at the center of the decision-making process, and traders should let it do the work rather than entering Friday with a predetermined directional bias.
Heading into Friday the MSI closed in a Ranging state with a moderate $1.55 spread. That moderate width means there is enough room within the range for tradeable swings, but without a trending state to anchor the direction, the highest-probability setups will come from failed breakouts and failed breakdowns at the MSI boundaries rather than straight trending trades. The presence of extended targets printing below at the close is worth watching closely because it suggests the sellers have not fully exhausted themselves, and any continuation of that pressure overnight could set the stage for another test of Thursday's lows or a push toward $746, which the MSI rescaling data suggests is likely to attract buyers once again. That said, the absence of extended targets in premarket Thursday morning was a reminder that even when the overnight picture looks bearish, the open can still produce a stabilizing bounce.
Bulls want to see price hold above $749.81 overnight and use it as a base to press SPY back through and above that level with conviction. If the MSI rescales into a Bullish Trending state with extended targets printing above, that would signal a meaningful recovery attempt and give bulls the momentum to target levels back toward $752 and beyond. Bears want to see $748.26 fail. A clean break below $748.26 with the MSI rescaling into a Bearish Trending state and extended targets printing below would confirm the sellers are pressing the advantage and bring the $746 area into view as the next likely support magnet.
Within the session, the core strategy is to sell rallies to $749.81 MSI resistance and target $748.26 support below, consistent with the bearish lean coming out of Thursday. If price fails at $749.81 and the MSI holds in a ranging or bearish state, that is confirmation to stay with the sellers. If price instead holds above $749.81 and the MSI rescales into a Bullish Trending state, that flip is the signal to shift approach and buy dips back to $749.81 as support targeting levels above. A failed breakdown at $748.26 with price reversing and the MSI rescaling higher is also a high-probability long setup, particularly if extended targets stop printing below as that reversal takes hold. Avoid forcing trades during a Ranging Market State unless a clear failed breakout or breakdown sets up at one of those boundary levels. The moderate MSI width means both directions are in play overnight, so staying reactive to what the MSI is doing in real time is far more valuable than committing to a bias before the open.
The long-term bull trend remains intact above $640 and failed breakouts and failed breakdowns continue to offer the highest-probability setups. Remain flexible, avoid trading during Ranging Market States unless a clear failed breakout or breakdown presents itself, and ensure all trades are fully aligned with MSI signals. 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

Dealers are selling SPY $756 to $770 and higher strike Calls while buying $751 to $755 Calls, indicating the Dealers' desire to participate in any relief rally on Friday. The ceiling for Friday appears to be $760, where a formidable wall of resistance spanning $752 to $755 and then $755 to $760 is sure to slow any ascent. Notably, Dealers are no longer selling ATM Puts for Friday, which we flagged yesterday as carrying little weight given the tiny quantity involved, and sure enough that proved to be the case. To the downside, Dealers are buying $749 to $690 and lower strike Puts in a 3:1 ratio to the Calls they're selling, displaying moderate concern that prices could move lower. With material support thin below $750 until $746, losing that level could see a rapid drop to $746. Below $750 is bearish and above $751 is bullish, though the resistance walls from $752 to $760 remain the zones to watch. Dealer positioning is unchanged at neutral/slightly bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $751 to $778 and higher strike Calls, indicating the Dealers' belief that prices are likely to stall or perhaps only drift modestly higher or lower next week, as they are neither selling ATM Puts nor buying ATM Calls — a posture that reflects a cautious, wait-and-see approach heading into the week. The ceiling for next week appears to be $758, with formidable resistance at $755 and $760 likely to cap any meaningful advance. To the downside, Dealers are buying $749 to $685 and lower strike Puts in a 5:1 ratio to the Calls they're selling, displaying significant concern that prices could move decidedly lower, as Dealers remain heavily hedged in the event conditions deteriorate. Major support sits at $750 and $745, and we recommend traders do the same and remain well hedged. We recommend traders remain bullish above $752 but below $751 we are bearish. For the week Dealer positioning is unchanged at 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 closed at $750.77 with VIX surging 9.64% to 17.18, shifting the bias toward caution. Watch $747.89 as immediate support — a break below puts $745 in play. Favor short setups on failed bounces near $752–$754, keeping stops tight above $754.57.

With volatility elevated and the 10-year sitting at 4.570, don't force trades — let the levels come to you and size accordingly. Review the premarket analysis posted before 9 AM ET for any changes in the model's outlook and Dealer Positioning.

Good luck and good trading!