Market Insights: Thursday, July 17th, 2025

Market Overview

U.S. stocks continued their march to fresh record highs Thursday, driven by renewed optimism in the economy and a strong start to earnings season. The S&P 500 and Nasdaq both closed at new all-time highs, powered by strong retail sales and a dip in jobless claims, which helped ease investor concerns about the potential impact of President Trump’s tariffs. Traders appeared to shrug off ongoing tension between Trump and Federal Reserve Chair Jerome Powell, turning their focus instead to signs of economic resilience.

Jobless claims dropped to 221,000 last week, the lowest reading in three months, while June retail sales rebounded solidly, suggesting the consumer remains in healthy shape despite headline risks. Netflix kicked off Big Tech earnings on a positive note with better-than-expected results and an upward revision to its full-year revenue forecast. Semiconductor giant TSMC also reported a record profit on surging AI demand, lifting chip stocks. Meanwhile, PepsiCo surprised with higher revenue and a narrowed 2025 profit drop, adding to the upbeat sentiment.

With the White House’s critique of the Fed taking a back seat for now, attention is already shifting toward who might replace Powell in 2026 and how that choice could influence Fed independence. On the legislative front, the House passed the GENIUS Act, a long-awaited bill that establishes federal oversight for stablecoins. That bill now heads to Trump’s desk, representing a victory for crypto advocates. As Wall Street looks toward Friday, the combination of strong data, rising earnings, and easing political pressure is creating a fertile ground for continued bullish momentum.

SPY Performance

SPY rose 0.61% on Thursday, closing at $628.04 after opening at $623.74 and hitting an intraday high of $628.40. The ETF dipped slightly at the open but quickly reversed course, with momentum accelerating once SPY cleared $625. The breakout marked a clear departure from the recent rangebound action and pushed the market to new highs. Volume was slightly above average at 63.11 million shares, showing steady investor participation behind the move higher.

Major Indices Performance

Small caps led the charge Thursday, with the Russell 2000 jumping 1.28% as risk appetite increased across the board. The Nasdaq climbed 0.74%, propelled by gains in chipmakers and strength in Big Tech. The Dow followed closely with a 0.52% advance, while the S&P 500 added 0.5%, setting another record close just under 6,300. Thursday’s rally was underpinned by better-than-expected jobless claims and a rebound in retail sales, which reinforced the narrative of a resilient U.S. consumer. Market breadth improved significantly, and while defensive sectors lagged, cyclical and growth names took the lead in a broad-based advance.

Notable Stock Movements

The Magnificent Seven saw mixed performance on Thursday with Netflix, Nvidia, Microsoft, Amazon, and Google posting gains, helping to lift the broader tech complex. However, Meta, Apple, and Tesla traded lower, showing that investors remain selective within the mega-cap space. Nvidia continues to benefit from tailwinds in the AI sector, while Netflix also stood out after raising its full-year revenue forecast following a solid earnings report. The group’s split performance reflects the nuanced nature of current market sentiment, where earnings and sector-specific trends are driving individual stock moves.

Commodity and Cryptocurrency Updates

Crude oil rallied 1.91% to settle at $67.65, rebounding sharply and continuing to trade within its broader consolidation range. While near-term momentum is positive, our model maintains a longer-term bearish bias, expecting a test of the $60 level due to persistent demand concerns. Gold slipped 0.43% to close at $3,344.60, with investor appetite for risk assets weighing on the metal. Bitcoin dipped 0.63% to finish just above $119,000, reflecting a cooling in sentiment after Wednesday’s bounce and despite favorable developments in crypto regulation.

Treasury Yield Information

The 10-year Treasury yield edged up slightly by 0.04% to finish at 4.456%, holding just below the key 4.5% level. While the move was small, it reinforced the broader theme of stable yet elevated yields that continue to influence equity valuations. A sustained move above 4.8% would pose a significant risk to the equity rally, while a drop below 4.3% could provide added fuel for further upside. For now, the market appears comfortable with current rate levels amid signs of economic strength.

Previous Day’s Forecast Analysis

Wednesday’s forecast called for SPY to trade between $618.75 and $628.75, with a bullish tilt if it held above $624. The model identified resistance at $625, $628, and $630, while support was projected at $620, $618, and $615. Long trades were preferred above $624, with a potential breakout scenario targeting $628 and $630. A failure to hold above $620 would have turned sentiment bearish with downside risk toward $615. The strategy favored dip buying around $620, particularly given the softening in PPI data and stabilizing macro backdrop.

Market Performance vs. Forecast

Thursday’s market action closely mirrored the model’s forecast. SPY opened above $623, hovered near the $624 bias level, and quickly accelerated once it cleared resistance at $625. The move to $628.40 slightly exceeded the forecast’s upper boundary, signaling a decisive breakout. SPY closed at $628.04, validating both the range and bullish bias. The key pivot at $624.30 acted as a springboard for the day’s rally, and the recommended long entries above this level were well rewarded. The model correctly identified support and resistance dynamics, delivering highly actionable insight for both breakout and trend-following strategies.

Premarket Analysis Summary

In Thursday’s premarket analysis posted at 8:31 AM, SPY was trading at $623.80, with resistance targets at $624.30, $626.30, and $628. Support was seen at $621, $619.80, and $618. The analysis favored a continued upward grind, provided SPY could reclaim and hold above the 624.30 bias level. Long trades were favored near support, while a failure to hold the bias level would likely lead to choppy consolidation between $624 and $621. A break below $621 could open the door to deeper downside targets, though sentiment was leaning bullish with expectations of “churning higher.”

Validation of the Analysis

Thursday’s market confirmed the premarket analysis with high accuracy. SPY opened above the 624.30 bias level, briefly dipped but quickly reclaimed it, triggering a steady move through both the $626.30 and $628 upside targets. The predicted consolidation below $624 never materialized, as buyers stayed in control throughout the session. The early strength and breakout aligned perfectly with the bullish forecast, and traders who followed the premarket roadmap had ample opportunity to participate in the upside. Once again, the analysis provided a reliable blueprint for intraday trading.

Looking Ahead

There are no major economic releases scheduled for Friday, meaning the market will likely take its cue from recent earnings and macro trends. With a clean calendar and solid momentum, traders should expect continued follow-through on Thursday’s breakout unless profit-taking or geopolitical surprises intervene. The lack of headline risk could allow for a quieter but still directional session as the market digests this week’s gains.

Market Sentiment and Key Levels

SPY enters Friday trading just above $628, sitting at new highs and building on its recent breakout. Sentiment remains bullish as economic data continues to point to resilience, and strong earnings reinforce investor confidence. Immediate resistance lies at $630, $632, and $635, while support is found at $625, $622, and $620. Bulls are in clear control as long as SPY holds above $625, and a move above $630 could accelerate gains toward $635. However, a break below $625 could spark a short-term pullback toward $620.

Expected Price Action

Our AI model projects SPY to trade between $624 and $632 on Friday, reflecting a narrow range and suggesting potential for both continuation and intraday volatility. With OPEX and mid summer price action, its likely tomorrow is choppy with difficult trading conditions. This is actionable intelligence. The bias remains firmly bullish, with the Call side dominating positioning and upside targets at $630, $632, and possibly $635 if momentum continues. A failure to hold $625 could trigger a pullback to $622 or $620, where dip buyers are again expected to emerge. External catalysts like tariff developments or unexpected earnings surprises could still inject volatility, but absent that, the trend favors higher prices into the weekend.

Trading Strategy

With SPY holding above $625 and pushing to $628, long trades remain favored. Traders should look for entries on dips toward $625 or $622, targeting a continuation toward $630 and $632. Confirmation through rising volume and trend follow-through will strengthen conviction. If SPY fails to hold $625, short trades may target $622 and $620, though the overall bullish bias suggests short setups should be tactical and quickly managed. The VIX dropped 3.73% to 16.52, indicating easing volatility, but caution is still warranted in a headline-sensitive environment. Smaller position sizes with tight stops remain appropriate until directional conviction is reestablished.

Model’s Projected Range

The model projects SPY’s maximum range for Friday between $623.75 and $632.25, with the Call side dominating within a narrowing 4-point band suggesting choppy price action punctuated by occasional trending moves. After drifting higher overnight, SPY opened just above $624 on better-than-expected jobs data and retail sales, both of which suggested continued economic resilience. A strong economy is typically bullish for stocks, and the market responded accordingly, entering rally mode for the entire session. Once SPY cleared $625, momentum accelerated, leading to a breakout to new all-time highs and a decisive move out of the recent consolidation range. As we've noted for weeks, dip buyers remain firmly in control, and bulls have not ceded ground since SPY reclaimed the $585 level. SPY closed near the session high at $628.04 on average volume, reinforcing the bullish case. With a close well above $625, bulls appear positioned to push price toward $635, where we anticipate potential resistance and some profit-taking. That said, the broader uptrend remains intact despite ongoing tariff uncertainty and will continue to do so as long as SPY holds above $585. Key resistance levels are now seen at $630, $632, and $635, while support is found at $625, $622, and $620. Today’s breakout from the recent tight range adds to the momentum favoring further gains. Overnight, bulls will likely defend the $625 level to sustain upside pressure, and a break below it could lead to a quick test of $620, where we again expect dip buyers to step in. While SPY is likely to grind higher, any significant macro or geopolitical catalyst could trigger sharper moves. Downside risk remains muted unless SPY breaks below $600, which would increase the odds of a retest of $585, though our model assigns low probability to that outcome. In the absence of a strong catalyst, dips toward $620 remain buyable, while a break below $615 would shift our stance bearish with $610 as the next support level. Notably, SPY closed outside the lower edge of the redrawn bull channel from the April lows, yet the model has not adjusted the channel signaling continued bullish strength. Resistance in the $630–$635 zone could slow further upside, but this resistance appears to be weakening, suggesting higher prices are likely. The market remains highly responsive to macroeconomic indicators, bond yields, inflation data, tariff headlines, and fiscal policy developments. Meanwhile, the VIX declined 3.73% to 16.52, supporting a cautious risk-on environment. We continue to favor long positioning through out-of-the-money Calls with 90-day expirations, given the likelihood of elevated volatility in the coming months. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI is currently in a Bullish Trending Market State, with SPY closing above MSI resistance turned support. The MSI began a series of rescalings higher after stronger than expected economic news was released in the premarket. With rapid rescalings higher coupled with extended targets above, reinforced the bull case which saw SPY move to new highs in a breakout of its recent tight range. The MSI range is wide and extended targets printed into the close implying the likelihood of a continuation of the rally on Friday. Currently MSI support stands at $625.15 and higher at $627.52.
Key Levels and Market Movements:
On Wednesday, we wrote: “We continue to buy dips at major support levels and on failed breakdowns.” We also noted, “Our bias remains to the upside until the market signals otherwise,” and added, “If bulls can hold $618, a push to $628 is possible on Thursday.” With SPY opening above $624 and the MSI rescaling higher rapidly with extended targets during the premarket, there was only one way to trade the open: find a spot to enter long. That opportunity came on a less-than-perfect failed breakdown right at 9:30, where price dipped to $624.18 before immediately reversing and reclaiming $625. While we don’t typically like to enter mid MSI, we had previously flagged $625 as a major level above which bulls would likely press their longs. Based on that, we entered long and set our first target at the nearest premarket level of $626.30. SPY hit that level by 11 a.m., prompting us to set T2 at MSI resistance of $627.19. That level came quickly as well, before noon. With the MSI continuing to rescale rapidly and extended targets still above, we simply held our long position to see if SPY might reach the overnight and premarket level of $628. Sure enough, price got there too. With an hour left in the session and one highly profitable trade complete, we closed the position and called it a day: one and done. This trade was a direct result of having a plan, executing with discipline, and trusting the MSI’s clear directional cues and timing alongside its alignment with our broader market model and levels. The MSI remains a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Friday brings no significant economic news, so it’s likely the market enters a “wait and see” mode, marked by a narrowing range and slowing momentum. That said, we fully expect the broader bull trend to continue, with the potential for new highs, supported in part by stronger-than-expected Q2 earnings. However, tomorrow is also OPEX, which often brings choppy, low-quality price action. If you've had a strong week as we have without a single losing trade, it may be a good mid-summer day to start the weekend early. Odds favor SPY backtesting $625, which, if it holds, could support a move toward $635. That said, our model is signaling a slowly rising probability of a 10–15% pullback in August, potentially ending the dip-buying trend. Until that probability becomes actionable, we continue to buy dips at major support and failed breakdowns. The bulls remain firmly in control, and our bias remains to the upside. Traders should stay alert to any tariff-related threats from the White House, but in their absence, we expect a slow grind higher, punctuated by brief consolidations. The market’s ability to overlook risks like these only increases the chance of a continued rally. While caution is still warranted, we anticipate a steady move higher, with overnight buyer support. If bulls can defend $625, a push to $630 or even $632 is possible Friday. A failure to hold $625 could bring a test of $620, where we expect buyers to re-emerge. A decisive break below $620 would raise the likelihood of a deeper pullback. If key levels hold, the market looks poised to resume its climb toward $635. The MSI remains in a Bullish Trending Market State with extended targets above, reinforcing the case for higher prices overnight. For bears to gain meaningful traction, a break below $600 is required, while a close below $625 would weaken the bull case. We favor long setups above $620, with potential short opportunities near $630 or on failed breakouts and breakdowns below $620, especially if the MSI shows signs of weakening. 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 $629 to $640 and higher strike Calls indicating the Dealers belief that prices are likely rangebound on Friday. The ceiling appears to be $635. To the downside, Dealers are buying $628 to $575 and lower strike Puts in a 4:1 ratio to the Calls they’re selling implying a bit higher concern that prices may move lower on Friday. Dealer positioning has changed from slightly bearish/neutral to bearish.   
Looking Ahead to Next Friday:
Dealers are selling SPY $629 to $650 and higher strike Calls indicating the Dealers belief that prices will continue to gravitate higher. The ceiling for next week appears to be $640 but not likely beyond this level. To the downside, Dealers are buying $628 to $555 and lower strike Puts in a 5:1 ratio to the Calls they’re selling, reflecting a bearish outlook for next week. This positioning is most likely more of a hedge as opposed to actual bearish concerns. That said, August is a seasonally weak period for the market so Dealers are taking on hedges to protect from any potential downside and this is showing up currently in our model. Dealer positioning is unchanged from bearish 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

With SPY holding above $628, traders should favor long entries on dips toward $625 or $622, targeting resistance at $630 and $632. Short trades may be considered if SPY breaks below $622, with downside targets at $620 and $615, though risk of reversal remains elevated. The VIX dropped to 16.52, signaling a lower volatility environment, but the market remains sensitive to macro headlines and earnings season developments. Keep trade sizes manageable, set tight stops near resistance, and stay alert for failed breakouts or breakdowns around key levels.

Review the premarket analysis posted before 9 AM ET to align with the latest model levels and Dealer Positioning.

Good luck and good trading!