Market Insights: Tuesday, July 21st, 2026
Market Overview
Stocks bounced back Tuesday as the Nasdaq jumped 1.3%, the S&P 500 gained 0.9%, and the Dow climbed more than 0.7%, with chip stocks leading the charge ahead of a heavy week of Big Tech earnings. Semiconductors surged again, echoing a rally across Asian markets, and Nvidia climbed nearly 2% after revealing it took a stake in neocloud provider Nebius. Investors are keeping their eyes locked on Alphabet's Wednesday report, eager to see how the AI spending story is actually translating into results.
Trade policy and geopolitics kept the backdrop complicated, though. President Trump announced a new round of 50% tariffs on a wide range of Canadian goods — beer, hockey sticks, milk, and chemicals — set to kick in within 30 days after the US accused Canada of discriminatory trade practices. Canadian oil imports were carved out of the tariff list, which matters given that crude is trading at its highest level since mid-June. Brent crude briefly pushed back above $91 a barrel following the latest escalation in the US-Iran conflict before easing slightly on Tuesday morning.
SPY Performance
SPY opened at $746.29 and wasted little time putting in a solid showing, with buyers stepping in early and pushing the tape up to a high of $749.04 before a modest pullback brought price down to a low of $744.19. Unlike the prior session where early strength faded and sellers took over, this time the bulls managed to hold their footing and keep the tape elevated into the close — a meaningful shift in tone after a stretch of failed morning rallies.
SPY closed at $748.32, up 0.84%, and while it's just one green day, the price action carried enough conviction to matter. Volume came in at 27.42 million shares, below average, which means the move was more measured than explosive — but in a market that's been leaning on the defensive side, even a quiet grind higher is a step in the right direction. The real headline from today's session was the VIX, which cratered 9.49% to close at 16.88. That's a sharp one-day drop in fear, and combined with SPY's ability to actually hold its gains through the close, it suggests the mood in the market is shifting. Whether this is the start of something sustainable or just a relief bounce remains to be seen, but the bulls finally have a session they can point to as a win. The burden of proof hasn't disappeared, but today at least gave the long side something to build on.
Major Indices Performance
The Russell 2000 led the way on the day, posting the strongest gain among the major averages with a 1.43% advance. That's a meaningful shift after a stretch of sessions where small-caps were content to lag and let the big names do the heavy lifting. Whether this is the start of a genuine rotation into smaller names or just a one-day burst of catch-up buying remains to be seen, but the magnitude of the move at least puts institutional money on notice that there's some life in this space.
The Nasdaq wasn't far behind, climbing 1.29% in a solid session for tech and growth names. After grinding through recent pressure, seeing the index push back with conviction is encouraging for bulls. The S&P 500 also finished meaningfully higher on the day. The broader risk-on tone clearly had investors comfortable adding exposure across the growth complex, and the Nasdaq's performance reflects that appetite coming back in a real way.
The Dow brought up the rear, though calling a 0.74% gain a laggard is relative — it's still a strong day by any reasonable measure. Blue-chips participated in the rally, just not with the same energy as the more risk-sensitive corners of the market. The spread between the Russell 2000 and the Dow — nearly 0.70 percentage points — tells an interesting story. When small-caps outpace blue-chips by that margin, it typically signals a broader risk appetite rather than defensive positioning, and that dynamic deserves attention as the market tries to build on this momentum heading into the next session.
Notable Stock Movements
Alphabet took the hardest hit in the Magnificent Seven today, sliding 1.38% to lead the group lower and stand out as the clear laggard on an otherwise constructive day for the broader market. That's a meaningful decline for one of the most widely held mega-cap names, and it's the kind of underperformance that draws attention when the major indices are logging solid gains across the board. Whether the selling reflects concerns about AI monetization timelines, competitive pressures, or simply profit-taking after a run, Alphabet's weakness was the defining story for the cohort today.
The rest of the Magnificent Seven painted a mostly red picture, making the group's performance a notable contrast to the strength seen elsewhere in the market. Tesla, NVIDIA, and Apple were the exceptions, finishing in the green and keeping the group from a full washout. That split — with hardware and consumer-facing names holding up while the search and software giants absorbed the pressure — suggests investors were making deliberate choices about where to rotate within mega-cap tech rather than treating the group as one trade.
The Magnificent Seven's mostly red showing is an interesting wrinkle in what was otherwise a risk-on session, with the Nasdaq climbing 1.29% and small caps leading the charge. The VIX dropping 9.49% to 16.88 reflects a significant easing of volatility that typically provides tailwinds for high-multiple growth names, which makes the weakness across most of the cohort worth paying attention to. Alphabet's decline is the one to watch most closely heading into the next few sessions.
Commodity and Cryptocurrency Updates
Crude oil pushed 1.74% higher on the session and closed at $84.68, rallying well above recent expectations and firmly entrenching itself in territory that complicates the Fed's path forward. At these levels, energy prices aren't just a nuisance — they're an active inflation driver that gives policymakers real pause about when and whether rate cuts make sense. Geopolitical tensions and supply dynamics continue to keep crude bid, and a sustained move above $70 that's now extended all the way into the mid-$80s means the inflationary tailwind from energy isn't fading anytime soon. The longer crude holds at these elevations, the harder it becomes for the Fed to justify easing.
Gold had a strong session, climbing 1.94% to close at $4,088. That's a meaningful extension of the recovery that had already reclaimed $4,000, and today's push higher confirms that buyers aren't done. The fundamental backdrop — central bank demand, geopolitical uncertainty, and a complex global rate environment — remains fully intact, and the price action is reflecting exactly that. Two consecutive strong sessions above $4,000 shifts the tone from stabilization to something that looks more like renewed momentum.
Bitcoin added 1.79% and closed just below $66,400, continuing its steady grind higher with growing conviction. The crypto market is building on a solid foundation here, with bulls successfully defending key levels and the price pushing closer to territory that would put a serious run at recent highs in play. No signs of meaningful distribution, and the path of least resistance remains squarely to the upside.
Treasury Yield Information
The 10-year Treasury yield continued its grind higher on the session, adding another 0.65% to close at 4.630%. That's not a dramatic spike, but it's the wrong direction — and after yesterday's move to 4.600% already erased the brief dip bulls were hoping would gain traction, today's extension just keeps the pressure building. Slow, steady, and persistent yield creep is in many ways more dangerous than a one-day shock, because it normalizes elevated levels and chips away at any technical resistance that might otherwise attract bond buyers.
Inside the framework, 4.630% pushes us deeper into uncomfortable territory. We're now 13 basis points above where we sat just yesterday, and the gap to 4.8% — the level where selling tends to become more aggressive and broad-based across equities — has shrunk to just 17 basis points. That is a thin margin, and the kind of distance that can evaporate on a single piece of economic data. A hot CPI read, a stronger-than-expected jobs report, or any hawkish commentary from Fed officials could close that gap in one session. The fact that yields have now strung together consecutive days of gains after the brief dip failed to hold tells you there's no real conviction among bond buyers right now.
Today's equity gains might tempt some to dismiss the yield story, but that would be a mistake. The market rallied today despite yields moving higher, which is worth noting — but resilience against a headwind is not the same as the headwind disappearing. Until the 10-year makes a convincing and sustained break back below 4.5% with multi-session follow-through, the ceiling on any equity rally remains real. Eyes stay on 4.8% as the next critical line in the sand.
Previous Day’s Forecast Analysis
Tuesday's forecast called for SPY to trade within a nineteen-point range bounded by $738 on the downside and $757 as the max upside target, with the bearish bias baked in from the start given that Monday's close at $742.21 was parked in the lower portion of that projected window. The model identified $748 as the session's defining level — the immediate gate above where positive gamma builds decisively — with bulls needing to reclaim it convincingly before any push toward the $750 call wall concentration became viable. Above $750, the forecast flagged $752 as the next decision point, $754 as resistance, and $757 as the absolute ceiling.
On the downside, $746 was the first line of defense, with $745 identified as the gamma flip where negative gamma takes hold and selling can accelerate. A break of $745 would put $744 in play, followed by $742 as a critical support level near Monday's close, $740 as a major put wall, and $738 as the ultimate floor. The trading strategy leaned toward short setups carrying the better risk-reward, with a failed rally into the $747-748 band on weak breadth setting up a clean fade entry targeting $743 first and $741-741.51 on follow-through. Long setups required patience, with a retest of the $741-742 zone offering a tactical entry targeting $748 and then $748.73 on momentum. Position sizing was recommended at 65-70% of normal exposure with stop-losses in the 1.75-2% range, reflecting the still-elevated VIX environment and the market's inability to hold early gains with any conviction.
Market Performance vs. Forecast
Tuesday's session delivered a strong validation of the model's structural framework, with SPY opening at $746.29 and climbing to close at $748.32 — a gain of 0.84% that played out almost entirely within the projected range and followed the directional roadmap with impressive fidelity. The forecast had identified $746 as the first line of defense on the downside and flagged $748 as the immediate gate where positive gamma builds decisively, and Tuesday's session essentially used both of those levels as its anchor points. Price opened just above $746, held above it throughout the session, and closed right at the $748 threshold the model had tagged as the critical bull-bear dividing line — a near-textbook interaction with the structural map.
The long setup framework proved especially actionable. The forecast outlined a tactical long entry on a retest of the $741 to $742 zone, but also specified that reclaiming and holding $748 on a retest would set up a momentum continuation play targeting $750 first. Tuesday's session validated the bullish pathway — price never tested the lower support shelf, which told disciplined traders the tape had shifted, and the grind toward $748 on stabilizing conditions aligned precisely with the rising market scenario the forecast described. The session high of $749.04 briefly pressed through $748 before settling just below, confirming the call wall concentration at $750 was doing its job as short-term resistance. The $748 level did exactly what the model said it would do.
The VIX drop of 9.49% to 16.88 was a significant development that amplified the bullish price action and pushed sentiment improvement beyond the base case scenario — the forecast had anticipated a gradual cooling, and this sharper-than-expected volatility collapse drove price action with more conviction than the model's conservative positioning guidance had assumed. It's worth noting the model does not account for unpredictable external catalysts, and a VIX compression of that magnitude often reflects macro or sentiment shifts that fall outside any rules-based framework's base case. Still, the directional bias, the key levels, and the structural logic all held. Risk management protocols protected capital for any trader who respected defined stops and kept size disciplined heading in. The framework delivered a reliable map for Tuesday's session, and the levels remain as relevant as ever.
Premarket Analysis Summary
The premarket analysis posted at market open identified SPY spot at $745.24 sitting in a call-dominated environment, holding the prior session's recovery footing and consolidating just above the gamma flip heading into Tuesday. The defining gate above was set at $746 — described as the immediate level where positive gamma firms up and the first obstacle buyers needed to reclaim with conviction. Above there, $748 was flagged as the heaviest concentration zone of the day, $750 marked the critical round-number pivot and major call wall acting as the primary magnet if buyers pressed, $751 was the next decision point, and $753 capped the expected move as the maximum upside. On the downside, $744 was the first level to watch just beneath spot, with a clean loss there shifting the tone. Below $744, $743 was flagged as the point where selling could accelerate, and $742 was identified as the key gamma flip and battleground where negative gamma takes hold. $740 marked the next decision point with a significant put wall as defense, and $738 sat at the bottom of the expected move as the line in the sand. The overall bias leaned bullish, with the $750 magnet as the upside focus and $742 as the critical downside pivot holding the bulls' footing.
The actual session largely validated the bullish structure. SPY opened at $746.29, clearing the $746 gate from the first print and signaling that buyers had conviction early. Price pushed to a high of $749.04, tagging the $748 concentration zone and approaching the $750 magnet without fully closing the gap. The $744 downside pivot held on a brief intraday dip to $744.19, with buyers defending that level and preventing any acceleration toward the negative gamma pocket. The close at $748.32 confirmed bulls retained control throughout the session, and the VIX dropping 9.49% to 16.88 reinforced the orderly, risk-on tone. The $742 downside scenario never came into play, and the analysis tracked well with how the day developed.
Validation of the Analysis
Today's session was a textbook confirmation of the premarket framework, with SPY interacting with the identified levels almost precisely as described. The analysis opened with spot at 745.24 and immediately flagged 746 as the defining gate — the level that needed to be reclaimed and held to unlock the move toward 748 and 750. SPY answered that call right at the open, printing $746.29 and clearing the gate from the first tick. That was the signal the bulls were in control, and the session never looked back from there.
The premarket was equally precise about what came next. Once 746 was reclaimed, the analysis described 748 as the heaviest concentration zone of the day and 750 as the major call wall magnet. SPY pushed to a high of $749.04, tagging 748 with authority and pressing within a dollar of the 750 round-number pivot before consolidating. The close at $748.32 landed the session right in the heart of the 748 zone the framework identified as the primary upside target, giving traders who followed the roadmap a clean, well-defined destination before the open. On the downside, the 744 level held as the low of $744.19 confirmed that first support was respected to the penny — buyers stepped in right where the analysis said the tone would shift if broken, and it held. The VIX cratering 9.49% to 16.88 reinforced the call-dominated, positive gamma environment the premarket described as the session's defining characteristic. From the opening tick to the close, every meaningful move had a named level waiting for it.
Looking Ahead
Wednesday's economic calendar is quiet, with no high-impact releases on the schedule to drive a directional move. That puts traders in pure positioning mode heading into the session, working off whatever momentum — or hesitation — Tuesday's tape left behind. Without a data catalyst to force anyone's hand, Wednesday becomes a session dictated by technicals, internals, and the macro narrative already baked into price action.
A light calendar doesn't mean a light session, though. When the data isn't there to set the tone, price discovery falls entirely on the participants, which can make moves feel either more deliberate or more chaotic depending on the underlying sentiment. If Tuesday's action left clean structure behind, Wednesday gives the dominant side room to press. If things are murkier, the lack of a hard catalyst just means unresolved tension finds its own outlet. Stay disciplined, respect your levels, and let price do the talking rather than forcing a thesis the calendar isn't supporting.
Market Sentiment and Key Levels
The directional bias today tilts bullish, with the bulls firmly back in the driver's seat after a broad-based rally across every major index. SPY gained 0.84% on the session, closing at $748.32 near the top of the day's range — that kind of strong close relative to the intraday spread is a constructive sign that buyers maintained conviction throughout the session rather than fading into the close. The VIX dropping 9.49% to 16.88 is a meaningful development, pulling the fear gauge down to a level that starts to feel more comfortable for equity bulls and removes some of the overhead anxiety that had been hanging over the market.
Key resistance sits at $749.04, the session high, and a clean break above that level on meaningful volume would put $750 to $752 squarely in play — psychologically, $750 is a level the market will have to wrestle with. On the downside, $744.19 marks the immediate support floor from today's low, and a breakdown below that zone would raise fresh concerns and likely bring $742 back into focus fairly quickly. The broad participation across indices — small caps leading the charge and the Nasdaq outpacing SPY — points to genuine risk appetite rather than a narrow, defensive bid. Gold's 1.94% surge to $4,088 is an interesting wrinkle, as safe-haven demand rising alongside equities suggests money is moving with confidence rather than caution. Bitcoin closing below $66,400 with a 1.79% gain reinforces that risk appetite is real but not reckless. The 10-year yield's modest uptick to 4.630% keeps the macro ceiling intact, and any further drift higher in yields remains the most credible threat to this rally's legs. For now, the bulls hold the edge, but this market needs volume to confirm the move.
Expected Price Action
Wednesday's session presents actionable intelligence generated by our AI model, with SPY projected to trade within a range defined by $738 on the downside and $753 as the max upside target. That fifteen-point window signals the market will trend rather than consolidate, and with Tuesday's close at $748.32 sitting in the upper half of the expected move, the bias leans bullish heading into Wednesday's open.
The defining level to watch Wednesday is $750 — that's the critical round-number pivot and major call wall that acts as the primary magnet if buyers continue pressing. Bulls need to hold the ground gained during Tuesday's session and push through $750 convincingly to unlock the next leg higher. Above $750, the model identifies $751 as the next decision point, with $753 capping the expected move top as the max upside ceiling. On the downside, $748 is the first level to defend — that's where the heaviest gamma concentration sits, and losing it cleanly would signal the rally is stalling. Below $748, $746 becomes the immediate gate and the level where positive gamma begins to firm up as support. A break of $746 shifts the tone meaningfully, putting $744 in play as a key battleground and the point where negative gamma starts to take hold. Below $744, $742 is the critical downside pivot — that's where selling could accelerate sharply, with $740 serving as a significant put wall and $738 marking the absolute bottom of the expected move and the ultimate line in the sand. With the VIX dropping 9.49% to 16.88 and the tape closing near the upper end of the projected range, momentum favors the bulls — $748 must hold on any early pullback, and if $746 breaks and $742 fails to contain the damage, expect an aggressive push through the negative gamma pocket toward the lower end of the range.
Trading Strategy
The VIX dropping 9.49% to 16.88 is a meaningful shift in sentiment and a genuine positive for the bulls. Breaking back below 17 is exactly the threshold mentioned in the prior session, and holding there gives traders more confidence to step up size toward the 75-80% of normal exposure range. That said, 16.88 is not a "all clear" signal — volatility can spike back quickly in this tape, so stop-losses should remain in the 1.5-1.75% range from entry. The below-average volume on today's session means the move higher, while encouraging, lacked the institutional conviction you'd want to see on a breakout day. Keep size disciplined and let price confirm direction before adding aggressively.
Long setups are more attractive here given the improved volatility backdrop. The $744.19 session low is your primary support shelf — a pullback into the $744-745 zone on light, orderly selling with stabilizing breadth is a quality long entry, targeting $748.32 first and then $749-750 on follow-through momentum. In a rising market scenario, a clean hold and retest of the $748 area as new support sets up a continuation trade targeting $752 initially, with $754-755 as the secondary target if buyers sustain pressure, and stops placed firmly below $744 to guard against a reversal. Losing that low on any pickup in selling activity changes the short-term picture quickly.
Short setups still deserve a spot in the playbook despite today's strength. A failed push above $749.04 on weak volume or deteriorating breadth is a clean fade entry targeting $745 first and then $744 on increased selling pressure. In a falling market scenario, a decisive breakdown below $744 opens short entries targeting $740 initially and $737-738 on a more extended decline, with stops placed above $750 to keep risk defined and tight. With VIX at 16.88, the market is in a healthier spot, but respect both sides of the range — trigger on confirmation, size appropriately, and honor your stops without second-guessing.
Model’s Projected Range
SPY's projected maximum range for Wednesday is $742 to $754, with the Call side dominating in an expanding band that suggests trending price action with intermittent chop. Wednesday brings no economic news due out so the market will trade on technicals. Tuesday's session saw SPY open at $746.29, push to a high of $749.04, and hold a low of $744.19 before closing at $748.32, up 0.84% on the day, with volume coming in lower than average — a relatively clean grind higher. SPY remains in the $745 to $750 range that has defined recent trading, with ongoing geopolitical uncertainty around global trade policy continuing to serve as a backdrop macro catalyst. On the upside, our model shows the first resistance at $750, and a clean break above that level targets $754 next — on the downside, the first support sits at $745, and a loss of that level opens the door toward $742. 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 $750, $754, $755, $760, while support rests at $745, $742, $740, $735. Given that SPY closed near the upper half of the range at $748.32, we favor shorting rallies near $750 until price can convincingly clear that level with volume. Bitcoin closed below $66,400, up 1.79% on the session, while the MAG stocks were mostly red led by Alphabet down 1.38% — Tesla was the standout exception, jumping 2.53% — making for a mixed picture where crypto showed quiet strength while large-cap tech mostly dragged, and sustained weakness across both leadership groups would be required to signal a deeper pullback. The VIX closed at 16.88, down 9.49%, suggesting a significant reduction in fear as the market rallied with conviction and options traders backed away from hedges. SPY closed near the upper portion of its rising trend channel, with structural support near $745 keeping the broader uptrend intact for now.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended in a Bullish Trending Market State with SPY closing at $748.32. Since SPY closed above MSI resistance, that former resistance level at $746.24 now flips to act as support heading into Wednesday, with $745.06 as the deeper support below. The MSI width remains extremely narrow at $1.18, and that tight spread tells you this is a market that is consolidating within a bullish structure rather than trending with full conviction. Extended targets were printing above at the close, which is an encouraging sign for the bulls and suggests upside pressure remains intact heading into the next session. Extended targets also printed during premarket, the AM session, the PM session, and into the close, confirming the bulls maintained meaningful control for the bulk of the day. The MSI rescaled higher overnight with extended targets in a very narrow bullish state, and after a brief rescale to a ranging state near the open, it settled back into a Bullish Trending state and held there through the close. That early ranging period was short-lived and gave way to a clean directional session once price broke above $746.24. With the MSI in a narrow bullish state and extended targets printing above at the close, expect sideways to possibly higher prices on Wednesday, absent any external catalysts. Now back above the 50-day moving average, the market may be positioning for a push toward the all-time high, though heavy resistance from $748 to $756 means the path higher is more likely a grind than a straight-line move. MSI support is $745.06 with resistance at $746.24.
Key Levels and Market Movements:
Monday we stated, "it is also likely the MSI rescales overnight and a short squeeze ensues which will push price back to test higher levels," and added, "Bulls want to see price hold above $741.51 overnight and use it as a base to push SPY back through MSI resistance at $742.69 with conviction," while also noting, "the most dangerous approach is treating Tuesday as a guaranteed continuation of Monday's selling without confirmation from the MSI first."
That read proved accurate as the bulls reasserted control through the session. SPY opened at $746.29, dipped briefly to a session low of $744.19 early in the process as the MSI momentarily rescaled into a ranging state, and then broke above $746.24 with conviction as the MSI transitioned into a Bullish Trending state. From that point forward, extended targets printed above for the majority of the session as SPY ground higher, pushing to a session high of $749.04 and closing at $748.32, up 0.84% on the day. The pattern was exactly what the MSI framework anticipated — an overnight rescale higher, a brief ranging period near the open, and then a sustained bullish trend with extended targets printing above as the session matured. The VIX dropped 9.49% to 16.88, a meaningful decline that reflects a real shift in sentiment and is consistent with the price action that unfolded throughout the day.
The session produced one well-defined setup for traders following the framework. The brief ranging state near the open, combined with the test of MSI support, offered a clean long entry before 10 AM with an easy path to targets above once extended targets resumed printing. From that point it was a hold-trailers kind of day as the MSI held firmly in a Bullish Trending state with extended targets printing above for most of the session. The setup was clear, level-driven, and fully supported by the MSI structure in real time. At minimum it was a 1-for-1 session for traders following the framework. It was an easy day to read and execute 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:
Wednesday has light economic news so the market is likely to move more sideways to up than trend given the Bullish Trending at the close. The narrow $1.18 MSI spread remains a key factor here. It signals that while the bulls are in control structurally, this is consolidation energy rather than the kind of wide, momentum-driven trending that produces clean multi-point runs. That compression can resolve in either direction, and traders should respect both scenarios without leaning too hard on a single bias before the open. With extended targets printing above at the close and SPY now back above the 50-day moving average, the bulls have the near-term edge, but the heavy resistance shelf from $748 to $756 is real and could slow progress considerably.
Heading into Wednesday the MSI closed in a Bullish Trending state with a very narrow $1.18 spread and extended targets printing above. Former resistance at $746.24 now acts as support, with $745.06 as the deeper support below. These are the levels that matter most for context heading into the session. The narrow width means any meaningful move away from current levels in either direction has a reasonable chance of triggering a rescale, so traders should watch the overnight session for any shift in MSI state that could change the character of Wednesday's open. The bulls need to hold $746.24 overnight and maintain the extended targets printing to keep the momentum case alive, while any failure of that level would be an early warning sign that the consolidation is leaning toward the downside.
Bulls want to see price hold above $746.24 overnight and use it as a base for a continued push into the $748 to $756 resistance zone. If the MSI holds in a Bullish Trending state with extended targets printing above, the strategy is to buy dips to $746.24 as support and target higher premarket levels above, accepting that the grind may be choppy given the density of overhead supply. Bears want to see $746.24 fail. A clean break below $746.24 with the MSI rescaling into a Bearish Trending state and extended targets printing below would shift the tone and bring $745.06 into view first, with a potential retest of the day's lows as the next meaningful target if that level also gives way.
Within the session, the core strategy is to buy dips to $746.24 as long as the MSI holds in a Bullish Trending state, targeting the premarket levels above as the primary objective. If price fails at $746.24 and the MSI rescales lower, that flip is the signal to shift approach and sell rallies back to $746.24 as resistance targeting $745.06 below. A failed breakdown at $745.06 with price reversing and extended targets stopping below is also a high-probability long setup if the situation develops. The narrow MSI width means both directions are genuinely in play, and the most productive approach is staying reactive to what the MSI is communicating in real time rather than committing to a directional conviction before the session begins.
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 $749 to $784 and higher strike Calls, indicating the Dealers' belief that upside will remain capped heading into Wednesday. The ceiling for Wednesday appears to be $754, though heavy resistance above $746 all the way to $756 will make any climb a grind. Notably, Dealers are also selling Puts at $746 to $748, and Dealers do not sell ATM Puts unless they believe there is a floor in the market at $746 — while these are relatively small quantities, it signals firm conviction that the market will trend higher from current levels. The range has narrowed for Wednesday, which could lead to choppy price action rather than a clean directional move, with below $745 being bearish and above $746 being bullish. To the downside, Dealers are buying $745 to $700 and lower strike Puts in a 4:1 ratio to the Calls they're selling, displaying significant concern that prices could move lower, though support at $745 and again at $740 should provide a cushion if the market loses ground. Dealer positioning is unchanged at neutral/slightly bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $753 to $784 and higher strike Calls while buying $749 to $752 Calls, indicating the Dealers' desire to participate in any rally this week, though they remain heavily hedged heading into earnings season. The ceiling for this week appears to be $758, though a wall of resistance from $749 to $760 could slow any continued ascent before prices reach that level. To the downside, Dealers are buying $748 to $691 and lower strike Puts in a 4:1 ratio to the Calls they're selling, displaying notable concern that prices could move lower. Support sits at $745 and again at $740 if the market loses ground, and we advise traders to remain bullish above $746 but below $745, the bias shifts 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
With SPY closing at $748.32 and the 10-year yield still above 4.5% at 4.630, the near-term bias leans cautiously long but selective. Use $744.19 as your key support level — a hold above there keeps the bulls in control, while a break below invites a quick retest of the $741–$742 area. Resistance sits near $749–$750, so failed breakouts above that zone offer short entries with tight stops above $750.
Keep size modest given below-average volume — thin markets can reverse fast. 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!
