Market Insights: Thursday, July 3rd, 2025

Market Overview

Wall Street continued its bullish streak Thursday, notching another round of all-time highs after a stronger-than-expected June jobs report tempered immediate hopes for a Federal Reserve rate cut but didn’t dampen overall optimism. The S&P 500 and Nasdaq both clinched new records for the third time this week, rising 0.8% and 1.0% respectively. The Dow also jumped 0.77%, inching closer to its own record. According to the Bureau of Labor Statistics, the U.S. added 147,000 jobs in June, beating the 106,000 forecast, while unemployment unexpectedly dipped to 4.1%. Though the strength in job numbers caused traders to back off bets for a July rate cut, sentiment remains focused on September as the likely starting point for policy easing. President Trump’s sharp criticism of Fed Chair Jerome Powell calling for his resignation added to speculation that leadership change may accelerate a more dovish shift at the Fed.

Meanwhile, markets were boosted by further signs of easing trade tensions. The U.S. lifted restrictions on chip design software exports to China, helping drive gains in semiconductor stocks like Synopsys and Cadence. This move, along with the recent U.S.-Vietnam trade deal, has fueled optimism that more agreements could materialize before the July 9 tariff deadline. On the legislative front, Trump’s sweeping tax and spending bill moved closer to passage after clearing a critical House procedural vote. Speaker Mike Johnson signaled confidence it would be finalized by Friday. With markets closed for the Fourth of July, traders wrapped up the week early on a high note, setting the tone for continued strength next week.

SPY Performance

SPY rose 0.79% on Thursday, closing at $625.34 after hitting a fresh intraday high of $626.28. The ETF opened at $622.45 and stayed firmly bid throughout the shortened session, confirming the ongoing bullish momentum and extending its micro channel higher. Volume came in at 49.51 million shares, respectable considering the early market close for the July 4th holiday. With the rally accelerating into the close, SPY remains firmly in breakout mode, and traders are watching to see if follow-through develops next week.

Major Indices Performance

The Nasdaq led Thursday’s gains with a 1.02% rise, followed by the Russell 2000, which added 0.94%. The S&P 500 climbed 0.79%, while the Dow gained 0.77%, putting its own record high within striking distance. Markets surged following the strong June jobs report, which offered a surprising lift despite lowering the odds of a near-term Fed rate cut. The broad strength was supported by strong performances in technology and growth sectors, while cyclicals and small caps kept pace. Defensive sectors lagged slightly as risk appetite remained elevated across the board.

Notable Stock Movements

The Magnificent Seven saw a green session nearly across the board, with Nvidia, Microsoft, and Amazon leading the way each up more than 1.3%. These names helped power the Nasdaq to new highs, reinforcing the tech-driven leadership of this rally. Tesla was the lone laggard, finishing the day essentially flat, while other key players in the group continued to attract bullish flows. The rotation within tech appears healthy, with no signs of exhaustion as leadership broadens and sentiment stays upbeat.

Commodity and Cryptocurrency Updates

Crude oil dipped 0.39% to $67.19 despite broader market strength, continuing its choppy pattern as traders assess global demand. Our model still forecasts a move toward the $60 level later this year. Gold pulled back 0.66% to settle at $3,337, slipping as traders shifted away from defensive hedges following the upbeat jobs report. Bitcoin closed just above $109,800 with a mild 0.12% gain, maintaining its position well above our long-only buy zone. Crypto remains buoyed by the broader risk-on environment and declining volatility.

Treasury Yield Information

The 10-year Treasury yield climbed 1.02% to 4.338%, moving closer to the 4.5% threshold that could pressure equities. While Thursday’s jump reflects a rethinking of the Fed's timing on rate cuts, yields remain below critical danger zones for now. As long as the 10-year stays under 4.5%, equities are likely to remain well-supported. However, traders should keep an eye on the bond market, as another strong economic release or shift in Fed rhetoric could accelerate yield spikes and shake up stock valuations.

Previous Day’s Forecast Analysis

Wednesday’s forecast expected SPY to trade between $616 and $625, with long entries favored above $618. The model called for a potential breakout above $622 to trigger momentum toward $625 or $626. It also warned that failure to hold $618 could spark a test of $615 or lower. Resistance levels were outlined at $622, $625, and $626, while key support was noted at $618 and $616. The strategy advised favoring long trades near support zones and tightening stops around resistance levels, especially ahead of the jobs data, which was expected to drive volatility.

Market Performance vs. Forecast

SPY followed the forecast exceptionally well, opening at $622.45 and rallying steadily throughout the day to close at $625.34, right near the upper edge of the projected range. The ETF never dropped below the key $618 level, confirming the model’s bullish bias and making long entries highly effective. Resistance at $622 was cleared early, triggering the expected run toward $625 and beyond. The high of $626.28 came within a hair of the final resistance level, validating the importance of those targets. Traders who followed the model’s levels and strategy had clear setups with minimal downside risk, reinforcing the value of disciplined execution.

Premarket Analysis Summary

In Thursday’s premarket analysis posted at 8:42 AM, SPY was trading at $622.03 with a bias level set at $620. The outlook leaned bullish, favoring long trades near support, with targets at $625 and $627.50. The report noted strong upward momentum and emphasized that as long as SPY held above $620, dips should be bought with confidence. It also downplayed short trade setups, arguing that any drop below support would likely be short-lived and difficult to capitalize on.

Validation of the Analysis

Thursday’s session aligned almost perfectly with the premarket game plan. SPY held well above the $620 bias level all session, confirming bullish control. Support never broke, and the market quickly advanced to hit the $625 target with ease, later pushing as high as $626.28. As the premarket analysis predicted, short setups were difficult to find, and the path of least resistance remained firmly to the upside. Traders who followed the premarket playbook had clean opportunities to ride the trend, validating the analysis as a reliable roadmap.

Looking Ahead

With markets closed Friday for the Fourth of July, attention turns to next week’s schedule. Monday and Tuesday are expected to be quiet with no major economic releases. However, Wednesday brings the release of the FOMC minutes, which could stir volatility depending on how the Fed frames its current stance on inflation and employment. Thursday follows with unemployment claims, offering another check on the health of the labor market. With momentum strong and sentiment upbeat, any surprises in these reports could quickly shift the tone, so traders should prepare for a potentially more volatile week.

Market Sentiment and Key Levels

SPY closed Thursday at $625.34, extending its rally deeper into the bullish micro channel. Market sentiment remains decisively bullish as strong economic data and a softer tone from macro indicators continue to support equities. The critical resistance zone now lies between $628 and $635, with dense congestion expected to slow further advances. Support levels have shifted upward, now anchored at $622, $620, $615, and $610. A clean break above $628 could open the door for a test of $635, while a drop below $620 may trigger a retest of $615. The bulls remain firmly in control, but key events next week could test that momentum.

Expected Price Action

Our AI model projects SPY to trade between $619.50 and $632 on Monday. The wide range suggests potential for directional moves rather than sideways chop. The market bias remains bullish, and actionable intelligence favors long trades as long as SPY stays above $620. If SPY breaks above $628, the next targets are $630 and $635. A failure to hold above $620 could invite a pullback toward $615 or $610, though the broader trend remains upward. Traders should prepare for a continuation of this grind higher unless macro news unexpectedly shifts sentiment.

Trading Strategy

Traders should continue to favor long entries near support at $622 and $620, targeting upside levels at $628, $630, and $635. A break above $628 with volume could trigger accelerated gains, but resistance becomes increasingly dense above that point, so stops should be tightened accordingly. Short trades may be considered near $630 or $635 only if clear rejection patterns emerge. A break below $620 may bring a quick move down to $615 or $610, offering lower-probability short setups in that zone. The VIX fell to 16.38, signaling continued low volatility, but with FOMC minutes due midweek, traders should expect volatility to return. Stay nimble and trade smaller ahead of economic events.

Model’s Projected Range

The model projects SPY’s maximum range for Monday between $619.50 and $632, with the Call side continuing to dominate within a narrowing range, suggesting choppy price action interspersed with occasional trending moves. Today’s shortened session extended the bull micro channel and strong trend, marking a robust start to July. Volume was respectable for a holiday-shortened day, again confirming bullish dominance with another all-time high. The market rallied following a stronger-than-expected jobs report, with momentum carrying into the early close, ending with SPY at $625.34. While tariff-related uncertainties warrant cautious optimism, the broader uptrend remains intact as long as SPY holds above $585—a level that now feels distant. On Monday, bulls will aim to defend the $620 level to pave the way for another leg higher; failure to hold this level could prompt a pullback toward $619, with a break below potentially testing $615. However, meaningful downside appears unlikely unless SPY falls below $600. Absent a major catalyst, our model continues to suggest dips will be bought and the market will grind higher, reinforcing our view that pullbacks represent buying opportunities. Resistance levels are noted at $628, $629, $630, and $635, while support lies at $622, $620, $615, and $610. SPY remains above the lower boundary of the redrawn bull channel from the April lows and is currently moving within a micro channel, an exceptionally strong pattern that should not be faded. Dense resistance between $629 and $635 may slow the uptrend, while a drop below $620 could introduce short-term downside risk within the broader bullish context. Market direction remains highly sensitive to macroeconomic indicators, bond yields, inflation data, tariffs, and fiscal policy. Meanwhile, the VIX fell 1.56% to 16.38, signaling reduced investor caution and a continued risk-on tone; at these levels, it may be wise to consider purchasing out-of-the-money Calls 90 days out, as traders should remain nimble in anticipation of potential volatility. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI is currently in a very narrow Bullish Trending Market State, with SPY closing well above MSI resistance turned support. Extended targets printed into the close and for the entire shortened session which signified the herd participating in the day’s rally. The MSI opened the day as it had closed yesterday with price well above MSI support. The MSI has not rescaled since yesterday’s close and its highly likely on Sunday or Monday, the MSI will rescale. SPY moved up relentlessly all day and extended targets confirmed the trend, keeping its users out of any shorts which would not have been profitable. Currently MSI support stands at $619.16 and lower at $618.50.
Key Levels and Market Movements:
On Wednesday, we noted: “Thursday brings the monthly Jobs Report, which has the potential to move the market in either direction.” We also stated, “Absent a macro catalyst, however, the market is likely to continue its upward grind,” adding that “the market appears set to drift toward $625 and possibly $626.” With this actionable roadmap in hand, and SPY opening above $623 while the MSI remained in a narrow bullish state with extended targets above, the only viable trade was to go long. Given the shortened holiday session and lack of a reliable pattern, the lone opportunity came right at the open with a breakout at $623.10. We don’t teach this particular setup in the newsletter, as it requires a more advanced understanding of market dynamics than we typically cover. While the breakout worked exceptionally well pushing price quickly to the premarket level of $625, we did not take this trade, as it didn’t meet our standard pattern criteria. Those who did take it likely saw strong results. For us, it was an early wrap to the week with no losses, solid gains, and another example of the power of a consistent daily plan, disciplined execution, and the strategic use of MSI for directional clarity, timing, and actionable levels. Integrated into our broader framework and model levels, MSI remains an indispensable tool for maintaining consistent trading performance.
Trading Strategy Based on MSI:
Monday brings no economic news, and with a long weekend ahead, market movement could be unpredictable. As we approach the July 9th tariff deadline, we advise caution—particularly given the parabolic rally over the past nine sessions. With protection still relatively inexpensive, we recommend all long books consider purchasing 90-day OTM VIX calls as a hedge against potential summer volatility. That said, in the absence of a macro catalyst, the market is likely to continue its upward grind. MSI printed extended targets throughout the session, and the mild pullback into the close is unlikely to disrupt the prevailing bullish trend. The market appears poised to drift toward $630 and potentially $635, building on sustained momentum. Bulls remain firmly in control, and maintaining levels above $620 should enable further upside beyond today’s highs. Volume was average for a holiday-shortened week, supporting the trend. For bears to gain real traction, a break below $600 would be necessary though even that might yield only limited downside. With a close above $625, a move toward $630 and fresh highs looks increasingly likely. While external risks, such as tariff headlines, could shift sentiment, holding $620 keeps the door open for a continued move higher. A break below $620 could prompt a test of $615 and may attract sellers, but without a meaningful breakdown, the path of least resistance remains higher. We continue to favor long setups above $615, while selective short opportunities may emerge above $630 or on failed breakouts and failed holds below $615 especially when MSI signals weakening conditions. As always, failed moves remain among the highest-quality 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 $626 to $640 and higher strike Calls while also selling $621 to $625 Puts, indicating the Dealers belief that prices will continue to drift higher on Monday with little downside risk. Dealers do not sell close to the money Puts unless they are confident price will move higher. The ceiling for Monday appears to be $630. To the downside, Dealers are buying $620 to $588 and lower strike Puts in a 2.5:1 ratio to the Calls they’re selling implying little concern that prices may move lower on Monday. Dealer positioning has changed from neutral to neutral/very slightly bearish.   
Looking Ahead to Next Friday:
Dealers are selling SPY $626 to $650 and higher strike Calls while also selling $615 to $625 Puts, indicating the Dealers belief that prices will likely continue to move higher next week, or at a minimum, not fall beyond $615. The likely ceiling for the week is currently $635. To the downside, Dealers are buying $614 to $555 and lower strike Puts in a 4:1 ratio to the Calls they’re selling, reflecting a bearish outlook for the week. Dealer positioning has changed from neutral 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 printing another record close and pushing toward dense resistance between $628 and $635, traders should continue favoring long trades near support levels at $622 or $620. Upside targets remain $628, $630, and $635, especially if price holds above $620. However, gains may begin to slow if volume does not expand. Short trades may be attempted on failed breakouts at $630 or $635, targeting $622 or $620, but these setups carry higher risk and require confirmation. With the VIX settling at 16.38, volatility remains low, but that may change midweek with the FOMC minutes release. As always, 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!