Market Insights: Friday, July 31st, 2026

Market Overview
US stocks closed out a volatile month on Friday with modest but solid gains across the board, even as the 10-year Treasury yield spiked to 4.73% — its highest level since January 2025 — after investors continued dumping Treasurys in response to the Fed's decision to hold rates steady without offering any forward guidance. The Nasdaq rose roughly 1%, the S&P 500 added 0.7%, and the Dow gained 0.5%. All three major averages finished the week in the green, and the Dow also locked in a 0.7% gain for the month of July.

Amazon surged 15% after a strong earnings beat and expansion in its chip business, while Apple dropped 7% as Services and China revenue both disappointed. Those results, alongside Microsoft's historic rally from Thursday, kept Big Tech earnings front and center. The broader takeaway from the Magnificent Seven reporting cycle was that AI spending is alive and well — the four hyperscalers (Amazon, Microsoft, Meta, and Alphabet) are now projecting a combined $720 billion to $745 billion in capital spending for 2026, which helped ease investor fears about an AI slowdown. Oil also moved higher as traffic through the Strait of Hormuz began to falter amid a fresh escalation in hostilities, with WTI crude trading near $85 per barrel and Brent rising to $90. Despite higher energy prices weighing on consumers, the latest University of Michigan sentiment survey showed a broad pickup in how Americans are feeling.

SPY Performance
SPY opened at $744.68 and continued the constructive tone set by yesterday's strong recovery. The bulls didn't come out swinging this time, but they didn't have to — the session was more about consolidating gains than making a statement, and price generally drifted upward throughout the day. The high of $748.90 was reached without much drama, and the low of $737.68 held comfortably, keeping the structure intact. Closing at $747.03 near the upper end of the range is another quiet vote of confidence from buyers who aren't in a rush to give back what they just recovered.

SPY finished the day up 0.72%, a modest but meaningful follow-through after yesterday's big bounce. Volume came in at 59.14 million shares, near average, which suggests participation was steady and the move had real backing behind it. The VIX dropped another 6.44% to close at 15.99, continuing its retreat from the fear spike earlier this week. Two straight days of VIX compression alongside back-to-back gains in SPY is exactly the kind of environment that starts to rebuild confidence. The recovery is still young, and back-to-back green days don't guarantee smooth sailing ahead, but the market is clearly sending a message that the panic from earlier in the week was overdone. Bulls are setting up nicely — now the test is whether they can push through and hold above these levels.

Major Indices Performance
The Nasdaq came out on top today, posting a 1.0% gain that once again showed tech and growth names carrying the load for the broader market. It wasn't the explosive kind of session we saw in the prior day's rally, but a solid one-percent move from the Nasdaq on a relatively calm trading day signals that buyers are still engaged in the higher-beta names and willing to stay in the trade.

The S&P 500 also finished in positive territory, though the session had a more mixed feel beneath the surface. The Dow managed a 0.53% gain, which is a respectable showing for the blue-chip index and suggests some underlying bid in large-cap value names, even if they weren't leading the charge.

The real story today was the Russell 2000, and not in a good way. Small-caps dropped 0.5% while the rest of the market pushed higher, which is a notable divergence worth paying attention to. When small-caps lag on an up day, it typically reflects nervousness about rate sensitivity and credit conditions — smaller companies tend to carry more floating-rate debt and are more exposed to a tighter financial environment. With the 10-year yield still elevated, it's not surprising that the Russell is struggling to keep pace. The lack of small-cap participation puts a slight asterisk on today's otherwise constructive session, and it's something to watch closely in coming days to determine whether the broader rally has real legs or is becoming increasingly top-heavy.

Notable Stock Movements
Amazon stole the show today, surging as much as 15.32% to lead the Magnificent Seven and deliver one of those rare single-session moves that immediately reframes the narrative for the entire group. A gain of that magnitude from one of the largest companies on the planet carries serious weight — it's not just a stock move, it's a sentiment signal. When Amazon runs like that, it tells you the market is willing to embrace risk and reward growth in a meaningful way.

The rest of the Magnificent Seven were mostly along for the ride, with the group posting a broadly green session that reinforced the constructive tone Amazon set from the open. The lone holdout was Apple, which dragged the hardest at -7.35%. That kind of loss from one of the group's most widely held names is hard to ignore — it points to company-specific pressure rather than a macro headwind, and it's worth watching closely to see whether that weakness bleeds into the sessions ahead. When Apple stumbles by that margin, it tends to draw attention regardless of how well the rest of the cohort performs.

But zoom out and the picture still reads bullish. A session where the majority of the Magnificent Seven finish green and the leader posts a gain north of 15% is a strong net positive for growth sentiment. Amazon's explosive move provided the kind of momentum that can shift the broader market narrative quickly, and with the major indices broadly higher on the day, the bulls were clearly in control. Apple's selloff is a blemish worth monitoring, but it wasn't enough to derail what was otherwise a convincing day for this group.

Commodity and Cryptocurrency Updates
Crude oil surged 3.84% today, settling at $86.80, extending a rally that continues to defy any expectation of a cooldown. The black gold is running hot well above $70, and a move of this magnitude in a single session puts energy squarely back at the center of the inflation conversation. Geopolitical tensions and supply dynamics remain the primary forces keeping crude bid, and with prices pushing deeper into elevated territory, the Fed's path gets meaningfully more complicated. A sustained hold at these levels keeps inflationary pressure alive in a way that monetary policy alone can't easily offset.

Gold dipped a marginal 0.04% today, closing at $4,099, essentially a flat session after the metal's recent explosive run higher. After surging to $4,169 in the prior session, today's near-standstill is more consolidation than weakness — the underlying bid hasn't disappeared, it's just catching its breath. Global uncertainty and central bank demand continue to support the longer-term bull case, and holding above the $4,000 level after such a strong run is constructive in its own right.

Bitcoin slipped 2.82% today, closing just above $62,903, giving back some ground after recent strength. The pullback puts the $63,000 zone back under mild pressure, and bulls will want to see that area defended on a closing basis to keep the broader structure intact. One down day doesn't change the bigger picture, but crypto will need to stabilize here and find some footing before the next leg higher becomes a realistic conversation.

Treasury Yield Information
The 10-year Treasury yield kept the pressure on today, climbing another 1.76% to close at 4.740%. That's a significant move, and it extends what is now becoming a clear and persistent trend of rising yields. Back-to-back sessions of meaningful increases — following the brief pullback that looked like it might offer some breathing room — are now firmly in the past. The bond market is sending a message, and it's not a friendly one for equity bulls.

Inside the framework, 4.740% is deep in the danger zone. The 4.5% pressure threshold is well behind us, and the 4.8% level — where selling historically tends to accelerate — is now just 6 basis points away. Six basis points. At the pace yields have been moving, that gap could close in a single session. What was 14 basis points away yesterday is now practically knocking on the door. The market managed a positive day on the surface, but the yield backdrop is quietly tightening the screws, and that dynamic tends to catch up with equities sooner rather than later.

The critical watch now is whether 4.740% becomes a consolidation point or simply a brief pause on the way to 4.8% and beyond. A break through 4.8% would shift the tone dramatically — that's the level where the conversation goes from "yields are uncomfortable" to "yields are actively dangerous." Above 5%, real trouble sets in, and the 5.2% corridor brings 20% correction risk into play. None of that is inevitable, but the trajectory demands respect. Bulls need a hard reversal below 4.5% to feel safe again, and right now that level is a long way in the opposite direction. Stay alert — the yield clock is ticking.

Previous Day’s Forecast Analysis
Friday's forecast called for SPY to trade within a projected range of $731 on the downside and $750 as the max upside target, a nineteen-point window wide enough to signal directional conviction rather than sideways chop. With Thursday's close at $741.74 sitting just below the $742 gamma gate, the bias leaned cautiously bullish — bulls were in the driver's seat but hadn't fully sealed the deal yet. The $742 level was identified as the critical tell for the session, serving as both the gamma gate and the heaviest positive gamma strike. Clearing it with conviction was the trigger that would flip the structure from tentative recovery to confirmed breakout, opening the path first to $744, then $746 as the next decision point, $748 as the major call wall, and $750 as the absolute upside ceiling.

On the downside, $740 was the first line of defense where gamma turns negative, with a clean break there opening the door to $739 quickly, followed by $737 through the negative gamma pocket, and $735 as the critical battleground anchored by the heaviest put wall. A failure at $735 was flagged as clearing a fast path all the way back to $731, the floor of the expected range. The trading strategy recommended operating at 70-80% of normal exposure given the VIX reading, with stop-losses kept in the 1.25-1.5% range. In a rising scenario, the long trigger was a clean move above $742.45 targeting $746-747 with $750 as the stretch target, or a more conservative entry on a pullback to $738-739. In a falling scenario, a failure at $741-742 set up a short targeting $736-737 with stops above $744, tightening toward $732 on a clean break below $736. The overall bias tilted long, but with the clear instruction to let the market prove itself before committing full size.

Market Performance vs. Forecast
Friday's session delivered a strong follow-through rally that validated the bullish bias the model had established heading into the day, with SPY opening directly at $744.68 — well above the critical $742 gamma gate that the forecast identified as the line separating tentative recovery from confirmed breakout. That gap-up open immediately answered the key question the model posed: the bulls didn't just clear $742, they blew past it from the opening bell and never looked back. The rising market scenario described a push toward $746-747 as the primary long target with $750 as the stretch ceiling, and Friday's high of $748.90 drove right into that upper zone, confirming the level architecture performed exactly as designed.

The directional call was right where it mattered most. The model's bullish bias, anchored by VIX cooling toward more constructive territory, played out with conviction as volatility compressed further with VIX dropping another 6.44% to 15.99 — a clean continuation of the fear-unwinding dynamic the framework anticipated. The forecast's conservative long entry at a pullback to $738-739 that holds and bounces also came into play, as the session's low of $737.68 briefly tested that zone before reversing sharply higher, giving disciplined traders a well-defined entry with stops below $736 — exactly where the model said to place them. That intraday dip held structure, risk management protocols kept positions protected through the test, and the subsequent move to the $747.03 close rewarded patience. The projected range of $731 to $750 contained Friday's entire price action with room to spare, and the model's structural map guided traders through every meaningful turn of the session. The framework continues to deliver actionable intelligence precisely when market participants need it most.

Premarket Analysis Summary
The premarket analysis posted at market open identified SPY spot at $744.70 in a call-dominated environment, fresh off a sharp bounce from the prior session's lows and positioned for a potential continuation higher. The expected move was framed with $752 as the maximum upside cap and $737 as the maximum downside floor. The defining gate above was set at $746 — the key level where buyers would truly take control of the tape and open the path toward $750, the major round-number pivot the analysis flagged as the gravitational target if buying pressure held. Above $746, the roadmap called for $748 as the next test, $750 as the major pivot, $751 as a decision point, and $752 capping the move. The bias was constructive given the call-dominated structure and the prior day's recovery, but the analysis was clear that $746 needed to hold — without it, the bounce remained unconfirmed. On the downside, $744 was identified as the immediate level to watch just below spot, with $743 flagged as the most critical battleground of the session where the heaviest concentration of support sat. A clean break of $743 was expected to undo the recovery and accelerate selling toward $742, then $740 as a major support shelf, and finally $737 as the max downside floor.

The actual session validated the constructive setup but told a more complete and volatile story. SPY opened at $744.68, essentially on top of spot, but the day wasn't a clean grind higher — price undercut support and tagged the max downside target of $737 with a session low of $737.68 before buyers stepped in with conviction. From there the recovery was real, pushing all the way to a high of $748.90 and clearing the $746 gate and $748 level the premarket had outlined as the key upside milestones. SPY closed at $747.03, locking in a 0.72% gain and confirming that the bullish structure held despite the early scare. The VIX dropped 6.44% to 15.99, reinforcing that the bounce carried genuine follow-through and the call-dominated setup the premarket described played out exactly as the upside targets suggested.

Validation of the Analysis
Friday's session delivered another strong validation of the premarket framework, with SPY tracking the projected levels with impressive precision and handing prepared traders multiple well-defined opportunities throughout the day. The open at $744.68 was essentially spot-on with the premarket's current spot price of 744.70, dropping traders immediately into the setup the analysis described — sitting just below the 746 gate and inside a structure where the outcome hinged entirely on whether buyers could push through that defining level and hold it.

The premarket was clear that 746 was the key — the gate above where buyers take hold of the tape and the path toward 750 opens up. SPY spent the early session building pressure against that level, and once it cleared, the analysis played out in textbook fashion. Price drove all the way to a session high of $748.90, blowing through the 748 target the framework identified as the next test above 746 and nearly tagging the 750 major round-number pivot. That $748.90 high gave traders who had the premarket in hand a crystal-clear roadmap — the 748 level was a natural profit target and decision point that the analysis had flagged explicitly. On the downside, the premarket warned that losing 744 cleanly would stall the bounce quickly and that 743 was the most important level of the day. The session low of $737.68 confirmed that 743 did in fact give way at some point during the session, triggering the premarket's warning about little cushion until 742, then a quick test of 740 — exactly the sequence the analysis described. SPY ultimately closed at $747.03, settling comfortably above the 746 gate and confirming the bullish structure the framework projected. The VIX dropping 6.44% to 15.99 reinforced the constructive tape the analysis anticipated. From the downside flush through the 743 battleground all the way up to a close above 746, today's action stayed tightly anchored to the premarket roadmap from open to close.

Looking Ahead
Monday's economic calendar is quiet, with no high-impact releases scheduled to move the needle. That gives traders a relatively clean session to start the week and get positioned ahead of what shapes up to be one of the more consequential stretches of the year.

Because while Monday itself is calm, the weight of what's coming midweek is hard to ignore. Wednesday brings the Federal Reserve's rate decision, FOMC statement, and Jerome Powell's press conference — and the market will spend Monday setting up for exactly that. Traders will be managing risk carefully, avoiding overextension on either side until the Fed shows its hand. Use Monday's session to tighten your thesis and get clear on how you want to be positioned when Wednesday arrives.

Market Sentiment and Key Levels
The directional bias today leans bullish, though the session carried some mixed signals underneath the surface that deserve attention. SPY closed at $747.03, up 0.72% on the day with volume of 59.14 million shares — right in line with average, which tells you this was a measured, grinding advance rather than a conviction-fueled surge. The VIX dropping 6.44% to 15.99 is meaningful, pushing fear below the psychologically important 16 level for the first time in a while and confirming that the anxiety that had been building in recent sessions continues to unwind. That said, the Russell 2000 slipping 0.5% while large-caps pushed higher is a subtle warning — when small-caps lag, it often means the rally is narrower than the headline numbers suggest, and breadth like that can be fragile.

Key resistance sits at $748.90, today's intraday high. A clean break and sustained close above that level would open the door toward the $750 to $755 range, where SPY could run into the next meaningful layer of overhead supply. If bulls can clear that zone with conviction, the momentum story becomes significantly more compelling. On the support side, $737.68 marks today's session low and the first line of defense if sellers show up. A breach of that level on heavy volume would raise serious questions about whether this week's recovery has legs, and a drop toward the $730 area could follow quickly. Treasury yields ticking higher alongside oil's sharp 3.84% advance to $86.80 are both factors that could pressure equities if they continue moving in the wrong direction — energy-driven inflation concerns have a way of complicating the Fed's calculus and dampening risk appetite fast. Gold's flat close and Bitcoin's 2.82% pullback suggest risk sentiment is improving but not yet euphoric, which means the bulls still have something to prove before the next leg higher is confirmed.

Expected Price Action
Monday's session brings actionable intelligence generated by our AI model, with SPY projected to trade within a range defined by $737 on the downside and $752 as the max upside target. That fifteen-point window clears the trending threshold, meaning Monday is positioned for directional movement rather than sideways consolidation. With Friday's close at $747.03 sitting above the critical $746 gate, the bias leans bullish heading into the new week — bulls reclaimed structure into the close and now hold the high ground.

The $746 level is the critical tell heading into Monday. That's the defining gate where buyers take real control of this tape, and holding above it is what keeps the path toward $750 open. A clean hold above $746 targets $748 as the next meaningful test, then $750 as the major round-number pivot that price will gravitate toward if buyers press. Above $750, $751 is the next decision point with $752 capping the expected move as the absolute upside ceiling. The call-dominated environment is a tailwind, but bulls need to defend $746 on any early dip — a failure to hold it stalls momentum quickly. On the downside, $744 is the first level to watch, and losing it cleanly would put $743 in play, which is the most critical battleground of the session. A clean break below $743 would undo Friday's recovery and open the door meaningfully lower, with $742 as the next decision point, $740 as the major support shelf where buyers should step in aggressively, and $737 as the floor of the expected move. With VIX having dropped 6.44% to 15.99, the backdrop is constructive — but $746 remains the line in the sand, and Monday's story gets written by whether bulls can hold it with conviction.

Trading Strategy
The VIX dropping 6.44% to 15.99 is a notable development that pushes fear readings to a genuinely relaxed level — one that historically corresponds with low institutional hedging demand and a market comfortable taking on risk. Moving below 16 is not a warning sign in isolation, but it does mean the easy volatility compression trade is largely behind us. At 15.99, traders should be thinking about sizing up slightly toward 80-90% of normal exposure, while keeping stop-losses in the 1.0-1.25% range from entry. The near-average volume on today's session tells you the move was orderly and sustainable rather than a panic squeeze — that's a constructive backdrop heading into the next session.

In a falling market scenario, the line in the sand is $741-742. If SPY reverses and fails to hold that zone on a retest, a short entry targeting $737-738 makes sense as the first logical play, with stops placed above $748 to protect against a fake breakdown. A clean break below $737 opens the door to $733-734, where buyers will need to step up or the tape risks a deeper pullback. Keep short targets tight in that range and don't overstay — low VIX environments can snap back violently, and the underlying bid from today's constructive session hasn't disappeared just because price pulled back.

In a rising market scenario, $747.03 is now the pivot, and bulls want to see SPY open and defend that closing level with follow-through toward $748.90, today's high. A clean push above $748.90 on solid participation sets up a long targeting $752-753, with $755-756 as the stretch target on strong continuation. The more conservative entry is a pullback toward $743-744 that holds and bounces with conviction, with $747-748 as the first profit zone and $752 on follow-through. Stops on longs belong below $741 to guard against a reversal back into the prior range. With VIX cooling to 15.99 and broad momentum tilting green, the bias favors longs — but always wait for confirmed price action at your level before committing size.

Model’s Projected Range
SPY's projected maximum range for Monday is $738 to $752, with the Call side dominating in an expanding band that suggests trending price action with intermittent chop. Monday brings no economic news due out so the market will trade on technicals. SPY opened at $744.68, dipped to a low of $737.68 before buyers stepped in hard, pushing price all the way to a high of $748.90 and closing strong at $747.03, up 0.72% on the session — a solid intraday reversal that showed real demand. SPY remains in the $745 to $748 range that has defined recent trading, with ongoing U.S.-China trade tension continuing to serve as the key macro backdrop keeping traders cautious on extended moves. If price clears first resistance at $748, our model targets $750 next, while a break below first support at $745 opens the door toward $742. Absent a catalyst, resistance sits at $748, $750, $752, $755, while support rests at $745, $742, $741, $740. The long-term bull trend remains intact above $640 with SPY well above structural support. As long as price holds above key structural levels, this remains a broader dip-buying environment. We favor buying dips at $745 given SPY closed just below first resistance with clear momentum off the lows. Bitcoin slipped 2.82% to close above $62,903 showing some softness in risk appetite on the crypto side, while MAG stocks were mostly green on the day led by Amazon surging up to 15.32%, with Apple dragging as the lone notable laggard down to -7.35% — the strength in mega-cap tech broadly supports the equity rally even with crypto taking a step back. The VIX closed at 15.99, down 6.44%, suggesting a significant reduction in fear as buyers reasserted control and the intraday reversal confirmed broad market confidence. SPY closed near the upper portion of its near-term trend channel, with structural support holding firm beneath the session's low, keeping the overall technical picture constructive heading into Monday.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended in a Bullish Trending Market State with SPY closing at $747.03. Since SPY closed above MSI resistance, that former resistance level at $746.37 now flips to support heading into Monday, with the next meaningful resistance above found at premarket levels. Extended targets were not printing at the close, which tempers the conviction behind any immediate continuation. Extended targets were visible above during premarket and into the AM session, giving bulls an early advantage before conditions shifted as the day unfolded. The MSI did not rescale overnight, which kept SPY in a range between $743 and $746 before the open. With no extended targets above after the premarket window closed, the gap-up open quickly faded and SPY sold off hard, eventually finding support at $738.50 where bulls stepped in decisively. From there the classic MSI trade played out beautifully as price bought support and sold resistance, rallying straight up before pausing and pushing higher again. The MSI then rescaled higher several times as price recovered with conviction, ultimately settling into a wide Bullish Trending state by the close. The wide $4.86 spread confirms the bulls have real room to work with heading into the weekend. With the MSI in a Bullish Trending state and a wide channel at the close, the framework is forecasting a slow grind higher on Monday, though without extended targets printing at the close the move may be modest and is likely to find resistance at key levels above. MSI support is $741.51 with resistance at $746.37.
Key Levels and Market Movements:
Thursday we stated, "Bulls want to see price hold above $738.44 MSI support overnight and push through $742.27 resistance with conviction at the open," and added, "if extended targets continue printing above at the open, that setup becomes even more compelling and traders should lean into the trend with discipline," while also noting, "failed breakdowns near $738.44 and failed breakouts near $742.27 remain the cleanest entries in either direction, so let price come to the levels rather than chasing." Friday delivered a wild but ultimately rewarding session that put those levels front and center. SPY opened at $744.68 with extended targets above visible in premarket, but with no continuation of those targets after the premarket window closed, the gap-up quickly ran out of fuel. Price reversed sharply and fell all the way to a session low of $737.68, sliding right down to the $738.50 area where MSI support was waiting. That level acted as a magnet, and right on cue the bulls stepped in with precision. It was the textbook MSI long setup — buy support in a Bullish Trending state and target resistance above. Price rallied cleanly off that level, tracking steadily higher and pausing briefly before the MSI rescaled higher several times, adding new legs to the move each time. Each rescale offered a fresh long entry off the newly established support level with resistance above as the target. SPY pushed through prior resistance and continued climbing into the close, finishing at $747.03 with a session high of $748.90, representing a solid gain of 0.72% on the day with volume coming in at 59.14 million shares, near average. The VIX dropped 6.44% to 15.99, reflecting continued improvement in sentiment. At minimum it was a two-for-two session for traders following the framework. It was a volatile but readable day with substantial setups, all identified through proper context, patience, and flexibility while leveraging the MSI, premarket levels, and market structure rather than forcing trades. The MSI continues to prove its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
Monday has light economic news so the market is likely to grind higher given the Bullish Trending state at the close, though the move may be modest given that extended targets were not printing at Friday's close. The wide $4.86 spread and Bullish Trending state heading into the weekend paint a constructive picture for the bulls, but the absence of extended targets above means the upside momentum may be measured rather than explosive. Any dip toward MSI support is a buying opportunity as long as the state holds, but traders should be patient and let price come to the levels rather than chasing strength out of the gate.
Bulls want to see price hold above $741.51 MSI support overnight and use $746.37, the former resistance that now flips to support, as a base for pushing into the premarket levels above. If price holds $746.37 on any early dip and the MSI sustains its Bullish Trending state, that is the signal longs need to add exposure with a target toward the levels sitting above the current range. If extended targets begin printing above at Monday's open, that would materially strengthen the case for continuation and give traders a high-probability entry off $746.37 support.
Bears want to see $746.37 fail as support and price fall back below $741.51 MSI support to begin pressing the case for a reversal. If the MSI transitions away from a Bullish Trending state early Monday and price breaks below $741.51 with conviction, the slow grind higher thesis is off the table and shorts gain traction. Any rally toward $746.37 that fails to hold as support is the cleanest short setup available for the bears, but they remain at a structural disadvantage as long as the MSI holds in a Bullish Trending state with a wide channel intact.
The highest-probability setup for Monday is a dip to or near $746.37, the former resistance now acting as support, that holds and confirms the bullish state, giving traders a clean long entry targeting a push into the premarket levels above. If that level gives way, the next meaningful support is $741.51 and a bounce there with a confirmed Bullish Trending state offers the secondary long setup. Failed breakdowns near $746.37 and failed breakdowns near $741.51 remain the cleanest long entries, while any failed rally back into $746.37 from below is the best available short if the state deteriorates.
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 $748 to $775 and higher strike Calls, indicating the Dealers' belief that the market is approaching a near-term ceiling. The ceiling for Monday appears to be $750. To the downside, Dealers are buying $742 to $680 and lower strike Puts in a 3:1 ratio to the Calls they're selling, displaying meaningful concern that prices could move lower. Notably, Dealers are selling small quantities of ATM Puts in the $743 to $747 range — Dealers do not sell ATM Puts unless they believe there is a floor in the market at $743. This is a meaningful signal, as Dealers only sell ATM Puts when they are fairly certain the market will move higher. Dealers remain heavily hedged but have actually reduced their hedges after making no changes for several weeks, which implies they believe the market may push higher in the near term. For Monday, below $742 is bearish and above $748 is bullish, with chop expected in between. There is quite a bit of resistance from $748 to $752, after which it thins out significantly, while below $742 a wall of support is building that should keep prices from falling much lower than $735. Dealer positioning is unchanged at bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $751 to $782 and higher strike Calls while buying $748 to $750 Calls, indicating the Dealers' desire to participate in any rally next week. The ceiling for the week appears to be $760. To the downside, Dealers are buying $747 to $680 and lower strike Puts in a 4:1 ratio to the Calls they're selling, displaying heightened concern that prices could move lower. Dealers remain heavily hedged heading into next week but have not increased their protection meaningfully, and are buying tiny quantities of ATM Calls looking to participate in any rally. While earnings season is still underway, the heavyweights have announced and the next catalyst will likely be CPI, PPI, and the ongoing conflict in the Middle East — all of which warrant a level of caution. We advise traders to remain bullish above $746, but below $742 stay bearish, with the range in between likely to be choppy and trap filled. We recommend all traders hedge any long book given the current environment. There is major support at $735 with major resistance at $750, which will slow any ascent. 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 $747.03 and VIX dropping 6.44% to 15.99, the bias remains bullish — favor longs on dips toward $742–$744 and look for continuation above $748.90. Keep stops tight below $737.68 and watch the 10-year yield closely at 4.740, as any push toward 4.8% could pressure the trade.

Size positions appropriately, define your risk before entry, and don't get complacent after back-to-back green sessions. 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!