Market Insights: Friday, July 18th, 2025
Market Overview
Stocks closed mixed on Friday as Wall Street digested strong economic data and earnings against the backdrop of rising tariff tensions. The Nasdaq rose slightly to a fresh record close, while the S&P 500 hovered just under Thursday’s high and the Dow slipped, weighed down by weakness in financials. Markets consolidated gains after a week of strong performance, with traders brushing off concerns over President Trump’s latest tariff threats. Reports surfaced that Trump is seeking broad tariffs of at least 15% on European imports, which could complicate talks ahead of the August 1 deadline for sweeping duties to take effect.
Netflix dragged on sentiment following a disappointing earnings reaction. Although the company delivered a strong profit beat and solid revenue, the market had hoped for more bullish guidance. That underwhelmed investors, especially after Thursday’s rally. Meanwhile, American Express surprised to the upside, pointing to continued strength among high-end consumers. The University of Michigan’s consumer sentiment survey added another layer to the data narrative, showing inflation expectations plunging to 4.4% from 5% in June, an encouraging sign for the Fed’s inflation fight. Fed Chair Jerome Powell remained in the spotlight following pushback from the White House, but for now, focus is shifting to who might replace him next year as Trump ramps up pressure on the Fed.
Despite the political noise, Friday’s session reflected a resilient market backdrop, driven by strong earnings, stable inflation expectations, and continued dip buying. That setup, combined with a light economic calendar and declining volatility, leaves markets in a holding pattern heading into the weekend with a bullish bias intact.
SPY Performance
SPY dipped 0.07% on Friday, closing at $627.58 after opening at $629.47 and hitting the day’s high at the open. Price action was muted following Thursday’s breakout, with SPY failing to hold its overnight gains and drifting lower throughout the session. Despite the red close, SPY still held above the key $625 level, preserving the broader bullish structure. Volume was light at 56.67 million shares, reflecting typical expiration-week dynamics and a pause in momentum after hitting new all-time highs.
Major Indices Performance
The Nasdaq led the way Friday, inching up 0.05% to notch a new closing high, buoyed by strength in Tesla and semiconductors. The Dow lagged, dropping 0.32%, weighed by weakness in banks and industrials. The Russell 2000 also underperformed, falling 0.62% as risk appetite softened across small caps. The S&P 500 edged down just below the flatline, retreating slightly from its record close. While the week ended on a mixed note, markets showed resilience in the face of fresh tariff headlines and fading Big Tech enthusiasm. Economic data and strong earnings continued to provide underlying support, though profit-taking appeared ahead of the weekend.
Notable Stock Movements
The Magnificent Seven delivered a mixed session Friday, with Tesla leading the charge higher, climbing over 3%. Nvidia and Microsoft traded lower alongside Netflix, which slumped more than 5% after a lukewarm earnings reaction. Despite beating profit expectations, Netflix failed to raise full-year guidance in a meaningful way, leading investors to trim positions. The rest of the group posted modest gains or losses, highlighting the sector rotation underway and the market’s more selective appetite for tech leadership. Overall, Friday’s action reflected cooling sentiment in Big Tech as traders took profits following strong midweek gains.
Commodity and Cryptocurrency Updates
Crude oil slipped 0.24% to $67.38, continuing its sideways grind within a broad consolidation range. While near-term momentum remains neutral, our model maintains a longer-term bearish bias, forecasting a move toward $60 as demand risks persist into the second half of the year. Gold added 0.32% to finish at $3,355.90, bouncing slightly after Thursday’s pullback and benefiting from mild risk-off sentiment late in the session. Bitcoin dropped 1.67% to close at $117,280, reversing some of its recent gains amid a cooling in speculative appetite and light end-of-week trading.
Treasury Yield Information
The 10-year Treasury yield fell 0.92% to close at 4.423%, pulling back from the 4.5% level that remains a key resistance threshold. Yields remain elevated, but the recent drop underscores shifting expectations around inflation and potential Fed policy adjustments. As long as the 10-year stays below 4.5%, equity markets are likely to hold their bullish posture. A break above 4.8% would pose a significant threat to valuations, while a move below 4.3% would likely trigger further upside in equities.
Previous Day’s Forecast Analysis
Thursday’s outlook anticipated SPY trading between $624 and $632 with a bullish tilt, emphasizing key support at $625 and resistance at $630 and $632. The strategy called for long entries above $625 and a preference for dip buying, especially near $622. A drop below $625 was expected to spark a move toward $620, while upside targets included $630 and $632 if momentum carried through. Traders were advised to expect a choppy session given expiration and summer trading conditions, with the Call side dominating positioning and sentiment tilted toward continuation.
Market Performance vs. Forecast
Friday’s market closely tracked expectations. SPY opened just under key resistance at $630, printed the session high at the open, and then slowly drifted lower toward the $626 support area. The pullback respected the $625 level, never threatening deeper downside, and confirmed the model’s forecast of a rangebound, choppy session with upside capped at $630. The projected range of $624 to $632 held, and the bias level at $625 remained intact throughout the session, validating the long trade thesis and support levels identified. The call for two-way price action proved accurate, with the upper end of the range rejecting early strength and afternoon lows being defended.
Premarket Analysis Summary
In Friday’s premarket analysis posted at 8:16 AM, SPY was trading at $628.56 with key resistance seen at $630 and $632.85 and support levels at $627, $625.75, and $622. The forecast expected consolidation around the $627 level, with a bullish bias remaining valid as long as price held above $625.75. The analysis favored long entries on dips near support, with limited upside expected beyond $630 unless a strong breakout occurred. The tone suggested a slow upward drift, supported by light macro headlines and options expiration dynamics.
Validation of the Analysis
Friday’s price action validated the premarket forecast with precision. SPY opened near the projected resistance zone, peaked at the bell, and retreated throughout the day to test support at $626. The premarket’s central pivot of $627 served as a key intraday level, while the $625.75 bias level was never breached on a closing basis. Traders who followed the premarket roadmap had opportunities for long entries near $626 with limited downside risk. The narrow range and muted volume also aligned with expectations for OPEX-driven chop, reinforcing the value and reliability of the premarket insights.
Looking Ahead
Next week kicks off with a quiet economic calendar through Wednesday, giving markets room to digest this week’s earnings and macro developments. The spotlight turns to Big Tech again midweek, with Tesla and Google set to report earnings Wednesday after the close. These releases could be a catalyst for volatility on Thursday, especially as they’ll shape broader sentiment in the Nasdaq. The back half of the week brings Unemployment Claims and PMI data on Thursday, followed by a quiet Friday. With seasonality turning weaker into August, traders should remain on alert for rotational shifts or renewed tariff drama.
Market Sentiment and Key Levels
SPY heads into Monday’s session trading near $627 after testing and holding key support on Friday. Sentiment remains cautiously bullish with the broader uptrend still intact and traders continuing to buy dips near major levels. Immediate resistance lies at $629, $630, and $632, with stronger resistance seen at $635 and $638. Support is found at $626, $622, and $620, with bulls firmly in control above $625. A breakout above $630 would likely trigger a run toward $635–$638, while a drop below $622 could open the door to a test of $620. Overall, market sentiment remains constructive, but with tariff noise and earnings still in play, volatility could resurface quickly.
Expected Price Action
Our AI model projects SPY to trade between $622 and $631 on Monday, offering a moderately wide range with room for both continuation and volatility. This is actionable intelligence. The bullish bias remains intact, with Calls dominating positioning and momentum favoring a move toward $630 and potentially $632 if bulls can reclaim early control. A break above $630 opens a path toward $635–$638, though price may face overhead resistance there. If SPY slips below $625 and breaks $622, a sharper move toward $620 or $615 could develop. While external macro catalysts remain light to start the week, headlines around tariffs or earnings surprises could spark bigger moves.
Trading Strategy
With SPY closing above $625 and defending $626 support, long trades remain favored heading into Monday. Traders should look to initiate longs on dips toward $625 or $622, targeting upside resistance at $630 and $632. If momentum carries SPY through $630 early, upside targets extend toward $635 and $638. Short trades may be considered if SPY breaks below $622, with downside targets at $620 and $615, though these setups should be approached cautiously in a strong bull trend. The VIX dipped to 16.41, reflecting a low-volatility environment, but traders should manage risk carefully as summer trading can still produce sudden reversals. Maintain flexible sizing and tighten stops near key resistance as price approaches upper targets.
Model’s Projected Range
The model projects SPY’s maximum range for Monday between $621.50 and $632, with the Put side dominating within a narrow but expanding 5-point band suggesting choppy price action punctuated by occasional trending moves. As projected yesterday, the market drifted higher overnight, with SPY opening above $629 as strong earnings continue to drive price action, overriding concerns about tariffs. By the open, SPY had already peaked for the day just below key resistance at $630 and spent the morning retracing the overnight gains. By midday, the market settled into a sideways chop, which is typical on OPEX expiry days. Despite closing off intraday highs on average volume, SPY notched another all-time high, reinforcing the ongoing bull trend. We've noted for weeks that dip buyers remain firmly in control, and that the bulls have not ceded ground since SPY reclaimed the $585 level. A close above $625 keeps the bullish momentum intact and sets the stage for a potential push toward $635–$638, where we expect significant resistance and potential profit-taking. That said, the broader uptrend remains intact despite tariff-related uncertainty and is likely to persist as long as SPY holds above $585. Key resistance levels heading into Monday are $629, $630, $632, $635, and $638. Major support is found at $626, $622, and $620. Momentum currently favors further gains, and overnight action will likely center around defending the $625 level. A failure to hold $625 could lead to a test of $622. A decisive break below $622 opens the door to a sharper move lower toward $620 or even $615. While we continue to expect dip buyers to step in at major levels, our model turns bearish below $620. Notably, a break of $600 would raise the probability of a retest of $585. While our model continues to assign this scenario a low probability, it has begun to signal potential weakness emerging in August. SPY closed near the lower edge of a redrawn bull channel from the April lows, suggesting the uptrend remains intact, albeit possibly at a slower pace. Resistance in the $630–$638 zone, which appeared to weaken yesterday, reasserted itself today and remains a key area to watch next week. The market remains highly sensitive to macroeconomic indicators, bond yields, inflation data, tariff headlines, and fiscal policy developments. Meanwhile, the VIX slipped 0.67% to 16.41, reinforcing a cautiously risk-on tone. We continue to favor maintaining a hedge for all long books at the current levels, using 90-day OTM VIX Calls, in light of expected elevated volatility in the coming months.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI is currently in an extremely narrow Bullish Trending Market State, with SPY closing just above MSI resistance turned support. No extended targets printed today. Yesterday’s wide, bullish MSI led to higher prices overnight with extended targets printing for much of the evening hours with SPY well above MSI resistance turned support. As the morning session developed, SPY retraced all of the overnight euphoria and the MSI rescaled through all three stages, bullish, bearish and ranging. All were narrow and as such, SPY chopped in a very tight less than $1 range for the afternoon session. The current MSI implies zero conviction either way given how narrow the range is. As such this implies likely consolidation overnight with prices likely to test both lower and higher. Currently MSI support stands at $627.25 and higher at $627.50.
Key Levels and Market Movements:
On Thursday, we wrote: “It’s likely the market enters a ‘wait and see’ mode, marked by a narrowing range and slowing momentum.” We also noted, “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,” and added, “Tomorrow is also OPEX, which often brings choppy, low-quality price action.” With SPY opening above $629 and limited upside left to trade, a less-than-textbook failed breakout followed shortly after the open. Without any extended targets above, we entered short at $629.25, with our first target at MSI support at $627.50. By 10:30 a.m., T1 was hit. We then set T2 at the premarket level of $627, which was quickly reached. With a stop at breakeven, we had a free trade on and chose to trail the remaining 10% to see if the premarket level of $625.75 might come into play. While the MSI rescaled to a bearish state, the range remained so narrow that little actionable information could be gleaned. Aware that it was OPEX and chop was likely to dominate, we chose to exit our trailer at MSI support at $626.50 by 1 p.m. and call it a day. One and done and an early start to the weekend after a strong week with no losing trades. Once again, our results were the direct result of having a plan, executing with discipline, and trusting the MSI’s clear directional cues and timing in alignment with our broader market model and levels. The MSI remains a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Monday brings no significant economic news, so trading will likely be driven by emotion, FOMO and fear, until an external catalyst emerges. The projected range has widened slightly but remains narrow at under 1%. That said, we continue to expect the broader bull trend to persist, with the potential for new highs, supported in part by stronger-than-expected Q2 earnings. Odds favor a SPY backtest of $625; if that level holds, it could support a move toward $635 or even $638. If $625 fails to hold or fails to recover quickly, a drop to $622 is likely. A break below $622 would open the door to a sharper move toward $620 or even $615. Our model is beginning to show a gradually rising probability of a 10–15% pullback in August, which could mark the end of the dip-buying trend. Until that probability becomes actionable, we’ll continue to buy dips at major support levels and on failed breakdowns, as bulls remain firmly in control of the broader market. Traders should stay alert to any tariff-related headlines from the White House, but in their absence, expect a slow grind higher with intermittent consolidation. The market’s ability to shrug off potential risks only reinforces the likelihood of continued upside. While the MSI is in a Bullish Trending Market State, the range is currently too narrow to be actionable. Watch for the MSI to rescale Sunday night for a clearer read on what Monday may bring. Longer term, for bears to gain meaningful traction, a decisive break below $600 is required. On Monday, we favor long setups above $622, with potential short opportunities near $632 or on failed breakouts and breakdowns below $622, particularly if the MSI begins to weaken. 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 while buying $628 Call indicating the Dealers desire to participate in the continuation of any rally on Monday. The ceiling for Monday appears to be $630. To the downside, Dealers are buying $627 to $575 and lower strike Puts in a 4:1 ratio to the Calls they’re selling/buying implying some concern that prices may move lower on Monday. Dealer positioning is unchanged from bearish to bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $628 to $645 and higher strike Calls indicating the Dealers belief that while prices may continue to gravitate higher next week, they are not positioned to take advantage of such a move. The ceiling for next week appears to be $638. To the downside, Dealers are buying $627 to $500 and lower strike Puts in a 6:1 ratio to the Calls they’re selling, reflecting a bearish outlook for next week. Dealers have gotten more bearish the last two days, likely more as a hedge as opposed to actual bearish concerns. That said, August 1st is another tariff deadline and given the seasonally weak period for the market, Dealers are protecting from any potential downside which is showing up in our model. For next week 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 trading near $627 and holding key support, traders should continue to favor long entries on dips toward $625 or $622, with upside targets at $630 and $632. A break above $630 opens the door to $635–$638 where profit-taking may emerge. If SPY breaks below $622, short trades targeting $620 and $615 may be considered, though caution is warranted as downside setups remain lower probability. Additionally shorts above $632 may be favorable on failed breakouts. Volatility remains muted with the VIX closing at 16.41, suggesting a generally risk-on tone but with the potential for fast shifts on earnings or geopolitical headlines. Maintain moderate position sizes and set tight stops near resistance or failed breakout zones. Review the premarket analysis posted before 9 AM ET to align with the latest model levels and Dealer Positioning.
Good luck and good trading!
