Market Insights: Monday, July 21st, 2025
Market Overview
Stocks wrapped up Monday’s session on a mixed note, but not without milestones. The S&P 500 crossed above the 6,300 mark for the first time ever, while the Nasdaq extended its winning streak to six sessions, posting another record close as traders geared up for a heavy week of Big Tech earnings. While the gains were modest, they marked another notch in the belt for the market’s bull run driven by AI enthusiasm and resilient earnings.
The Nasdaq added 0.4%, fueled by anticipation around results from Alphabet and Tesla, both due to report Wednesday after the bell. The S&P 500 edged up just over 0.1%, managing to settle above the closely watched 6,300 level. The Dow, meanwhile, reversed earlier gains and closed fractionally lower, capping a quiet start to what’s expected to be a pivotal week.
Investor attention is now split between two major themes: tech earnings and trade developments. President Trump’s August 1 tariff deadline looms, and uncertainty remains high as Europe pushes back against the administration’s aggressive stance. Over the weekend, Commerce Secretary Howard Lutnick confirmed that the deadline was a “hard stop,” while Treasury Secretary Scott Bessent emphasized the need for quality over speed in finalizing trade deals.
Elsewhere, upbeat results from Cleveland-Cliffs and Verizon helped offset some market jitters. Cleveland-Cliffs benefited from protective tariffs boosting steel demand, while Domino’s Pizza posted better-than-expected sales as new menu offerings attracted customers. Overall, 86% of the 59 S&P 500 companies reporting so far have topped estimates, a historically strong figure even if expectations were relatively low. With Big Tech earnings on deck and trade drama unresolved, markets are poised for more fireworks this week.
SPY Performance
SPY rose 0.19% on Monday, closing at $628.76 after opening at $629.30 and reaching an intraday high of $631.54. The ETF rallied early, marking another all-time high before giving back much of its gains during the afternoon session. Despite the modest close, SPY maintained its position above the critical $625 level. Volume came in at 58.81 million shares, slightly below average, consistent with a market pausing just below key resistance.
Major Indices Performance
The Nasdaq led the major averages on Monday with a 0.38% gain, continuing its record-breaking streak as traders bought ahead of major earnings from Alphabet and Tesla. The S&P 500 followed with a 0.12% rise, closing above 6,300 for the first time in history. The Dow lagged the broader market, finishing slightly in the red after flipping from earlier gains. The Russell 2000 declined 0.37%, as small caps once again underperformed amid cautious risk sentiment. Overall, large-cap tech leadership remains dominant while broader participation continues to narrow as investors wait for fresh catalysts.
Notable Stock Movements
Among the Magnificent Seven, Alphabet stole the spotlight with a 2.72% surge ahead of its earnings report, helping to carry the Nasdaq higher. Meanwhile, Tesla, Microsoft, and Nvidia dipped slightly, suggesting some mild profit-taking after last week’s strong tech run. The rest of the group posted modest gains, reflecting a rotation among leaders and a more selective risk appetite. Alphabet’s performance highlighted growing optimism around AI-driven revenue growth, while Monday’s pullback in other tech names showed that investors may be tempering expectations ahead of results.
Commodity and Cryptocurrency Updates
Crude oil dropped 0.50% to $65.72 as the market continued to grind lower toward our long-standing target of $60. Persistent concerns over softening demand into the second half of the year continue to weigh on sentiment. Gold rallied 1.55% to $3,410.47, benefiting from a slight risk-off tone and renewed interest in safe havens amid global uncertainty. Bitcoin slipped 0.80% but held above $117,100, consolidating after recent gains and reflecting a pause in speculative appetite.
Treasury Yield Information
The 10-year Treasury yield edged up 0.19% to close at 4.377%, hovering below the critical 4.5% threshold that markets are closely watching. Yields remain elevated, and any push toward 4.5% or higher could weigh heavily on equities. Conversely, a drop below 4.3% would likely fuel further upside in risk assets. For now, yields are stable, providing a constructive backdrop for stocks—especially as inflation remains in check and economic data stays supportive.
Previous Day’s Forecast Analysis
Friday’s newsletter projected SPY to trade between $622 and $631 with a bullish bias intact. The strategy favored long entries on dips near $625 or $622, targeting $630 and $632, while also noting the potential for a move toward $635–$638 if bulls gained early control. The model emphasized support at $625 and called for caution around a break below that level, which could shift momentum toward $620 or lower. The tone remained optimistic but highlighted the risk of reversals, especially near upper resistance levels.
Market Performance vs. Forecast
Monday’s action largely tracked the forecast. SPY opened just below $629 and surged to $631.54 before momentum faded, echoing the model’s expectation for strength into resistance followed by profit-taking. The high came just shy of the $632 target, and SPY pulled back toward $628, staying well within the projected range of $622 to $631. Importantly, the ETF never threatened the $625 level, reinforcing the bullish bias and confirming key support levels. The trading strategy of buying dips around $625 again proved effective, while upside was capped at a familiar zone, giving traders clean technical levels to trade from.
Premarket Analysis Summary
In Monday’s premarket analysis posted at 8:04 AM, SPY was trading at $629.09 with immediate resistance noted at $631 and $632. Key support zones were identified at $628, $626.50, and $625, with the bias level marked at $628. The analysis maintained a cautiously optimistic tone, expecting upward continuation as long as SPY held above the $628 pivot. The plan suggested favoring long trades on dips and being prepared to switch short if SPY failed to hold above support or stalled near resistance.
Validation of the Analysis
Monday’s price action validated the premarket roadmap with precision. SPY opened near $629, pushed through to hit the first target at $631.54, and then stalled right below the $632 resistance level. As flagged in the analysis, price rolled over after reaching an upper target, and support held cleanly at $628 into the close. The bias level at $628 served as a critical pivot throughout the session, with long trades off support offering solid risk-reward setups. Traders who followed the premarket plan had multiple chances to capture intraday moves, and the forecast proved timely and accurate in identifying both upside targets and key reversal zones.
Looking Ahead
The macro calendar remains quiet through midweek, allowing markets to focus entirely on earnings. Alphabet and Tesla will headline Wednesday’s post-close action and could set the tone for the rest of earnings season. With sentiment running hot and valuations stretched, traders should prepare for volatility and be ready to act if results fall short of lofty expectations. Thursday brings fresh Unemployment Claims and PMI data, while Friday is free of major releases. Until then, all eyes remain on Big Tech to keep the rally alive.
Market Sentiment and Key Levels
SPY heads into Tuesday trading just under $629 after making a new all-time high intraday and closing above $628 support. The bull trend remains intact, with momentum favoring upside as long as SPY holds above $625. Immediate resistance lies at $630 and $632, with stronger resistance expected at $635 and $638. On the downside, support rests at $626.50, $625, and $624. Bulls remain in control above $625, while a break below that opens the door to a deeper pullback toward $620 or $615. With earnings and trade tensions in play, traders should be alert for sharp intraday reversals.
Expected Price Action
Our AI model projects SPY to trade between $627 and $632.50 on Tuesday, a moderately tight range indicating choppy two-way trading with pockets of trending momentum. This is actionable intelligence. The bullish bias remains, and SPY is likely to test resistance at $630 and $632 again. A breakout above $632 sets up a push toward $635 or even $638, where we expect profit-taking. If SPY breaks below $625, downside targets emerge at $622, then $620, and ultimately $615 if pressure accelerates. Traders should stay nimble, especially with earnings risk midweek and a lack of major economic news until Thursday.
Trading Strategy
With SPY holding above $625 and confirming strength at $628, long trades continue to be favored heading into Tuesday. Look to initiate longs near $626.50 or $625 with targets at $630 and $632. If momentum pushes past $632, target $635 and $638 with caution, as this zone is likely to produce exhaustion or a sharp fade. Short trades may be considered if SPY fails at resistance or breaks below $625. A confirmed drop below $624 opens downside toward $620 or $615, though shorts remain lower probability while the uptrend is intact. The VIX rose slightly to 16.64, still signaling a low-volatility environment but with room for sudden swings, particularly as earnings roll in. Maintain disciplined position sizing and tighten stops as price nears upper resistance.
Model’s Projected Range
The model projects SPY’s maximum range for Tuesday between $625 and $633.50, with the Call side dominating within a narrowing 4-point band suggesting choppy price action punctuated by occasional trending moves. As projected on Friday, the market moved higher overnight and into the day session, reaching a new intraday high of $631.54 before succumbing to profit-taking at these elevated levels. Strong earnings continue to drive price action, overriding concerns about tariffs. At the open, SPY was trading just below $629. Strong momentum pushed SPY to the highs of the day, where it remained until 1 p.m., after which profit-taking caused SPY to give back much of its gains. The $632 level, identified Friday as a likely top, proved to be a strong resistance area, with SPY approaching but failing to breach it in the afternoon. Nonetheless, SPY notched another all-time intraday high, reinforcing the prevailing bull trend. As we've noted in recent weeks, dip buyers remain firmly in control, and the bulls have not ceded ground since SPY reclaimed the $585 level. A close above $625 keeps bullish momentum intact and sets the stage for a potential push toward the $635–$638 range, where we expect significant resistance and likely profit-taking. Despite ongoing tariff-related uncertainty, the broader uptrend remains intact as long as SPY holds above $585. Key resistance levels heading into Tuesday are $629, $630, $632, $635, and $638. Major support is seen at $624, $623, and $620. Momentum currently favors further gains, with overnight action likely centered around defending the $627 level. A failure to hold $627 could lead to a test of $625, and a decisive break below $625 opens the door to a deeper pullback toward $620 or even $615. While we still expect dip buyers to emerge at major support levels, our model turns bearish below $620. A break of $600 would significantly increase the probability of a retest of the $585 level. While our model continues to assign this scenario a low probability, it has begun to detect early signs of potential weakness emerging in August. SPY closed above the lower edge of a redrawn bull channel originating from the April lows, suggesting the uptrend remains intact, albeit potentially at a slower pace. The $630–$638 resistance zone remains heavy and is likely to temper near-term upward momentum. The market remains highly sensitive to macroeconomic indicators, bond yields, inflation data, tariff developments, and fiscal policy shifts. Meanwhile, the VIX rose 1.40% to 16.64, still low enough to reflect a cautiously risk-on environment. We continue to recommend maintaining a hedge on long books at current levels using 90-day out-of-the-money VIX calls, given expectations for elevated volatility in the coming months.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI is currently in a narrow Ranging Market State, with SPY closing mid-range. Extended targets printed for much of the day’s session as SPY reached new intraday highs. Overnight SPY gapped up which saw the MSI rescale higher to a narrow Bullish Trending Market State. By the open the MSI had rescaled to a wide, Ranging Market State but at the open, was back to a bullish state with extended targets above. This led to price moving to the day’s highs and staying there until the afternoon session where SPY retraced much of the gains of the day. With the MSI in a narrow ranging state, the market is showing some confusion and trepidation about what may follow tomorrow. As such the implication is price may test the day’s lows or the day’s highs overnight. Currently our model favors a retest of the day’s lows which we expect to hold with Tuesday bringing more sideways price action. Currently MSI support stands at $628.61 with resistance at $629.14.
Key Levels and Market Movements:
On Friday, we wrote that “We continue to expect the broader bull trend to persist, with the potential for new highs.” We also noted that “We’ll continue to buy dips at major support levels and on failed breakdowns, as bulls remain firmly in control of the broader market,” and added that “On Monday, we favored long setups above $622, with potential short opportunities near $632.” With this plan in hand and SPY opening just below $629, we felt confident buying at the open as the MSI rescaled to a bullish state at $628.75, with potential upside to $632. Knowing the odds of price moving from MSI support to resistance in a bullish state were over 70%, we went long and set our first target at the premarket level of $631, since MSI resistance was less than $1 from our entry and we never trade SPY with less than a $1 minimum first target. SPY moved higher quickly, and we took 70% of the trade off at T1 before 10 a.m., looking next to $632 for T2. With extended targets above, we waited for price to reach our second target, but a triple top around 1 p.m. made us question whether price would make it to $632. We took off another 20% at $631.40 and moved our stop to breakeven, trailing the remaining 10%. By 2:45 p.m., extended targets stopped printing and price fell to $630.50. While we would have liked to short at the day’s highs, extended targets kept us from doing so, and instead we closed our final 10% at $630.50 and called it a day. SPY did eventually fall back to MSI support, but when a trend is as strong as it was all day and overnight, and with a profitable trade on the books, we go into profit protection mode and never risk what we've earned. Less is more in trading, and we were satisfied with one clean long to start the week, thanks to 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:
Tuesday 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 narrowed slightly, suggesting more sideways price action. Still, we continue to expect the broader bull trend to persist, supported by stronger-than-expected Q2 earnings and the potential for new highs. Odds favor a SPY backtest of $628, which, if it holds, could support a move toward $635 or even $638. If $628 fails or doesn’t recover quickly, a drop to $626 becomes likely, and a break below $626 would open the door to a sharper move toward $620 or even $615. Our model is beginning to reflect a gradually rising probability of a 10–15% pullback in August, which could mark the end of the recent 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, we 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 currently in a Ranging Market State, the range remains too narrow to be actionable; watch for the MSI to rescale for a clearer read on Tuesday’s direction. Longer term, for bears to gain meaningful traction, a decisive break below $600 would be required. For Tuesday, we favor long setups above $626, 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 indicating the Dealers belief that prices may begin to move more sideways on Tuesday. The ceiling for Tuesday appears to be $635 although $632 also looks like formidable resistance. To the downside, Dealers are buying $628 to $575 and lower strike Puts in a 3:1 ratio to the Calls they’re selling implying less concern that prices may move lower on Tuesday. Dealer positioning has changed from bearish to slightly bearish.
Looking Ahead to Friday:
Dealers are selling SPY $629 to $645 and higher strike Calls indicating the Dealers belief that while prices may continue to gravitate higher this week, they are not positioned to take advantage of such a move. The ceiling for the week appears to be $640 but $638 also represents major resistance. To the downside, Dealers are buying $628 to $500 and lower strike Puts in a 6:1 ratio to the Calls they’re selling, reflecting a bearish outlook for the week. Dealers got more bearish late last week but have not added to their hedges this week. But with August 1st as 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 the 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
SPY continues to trade just under resistance near $629 after tagging new all-time highs Monday. Long trades remain favored on dips toward $626.50 or $625 with upside targets at $630 and $632. A breakout above $632 could trigger a push to $635–$638 where we expect heavy resistance and profit-taking. Short trades may be initiated if SPY fails to break above $632 or drops below $625, with targets at $622, $620, and $615. Shorts should be approached cautiously given the prevailing bull trend. The VIX at 16.64 still reflects a low-volatility environment, but earnings and macro headlines could change that quickly. Maintain disciplined sizing and use tight stops around major levels to protect gains. Review the premarket analysis posted before 9 AM ET to account for any changes in the model’s outlook and in Dealer Positioning.
Good luck and good trading!
