Market Insights: Thursday, July 9th, 2026
Market Overview
Stocks bounced back on Thursday as the AI trade took center stage ahead of SK Hynix's highly anticipated Nasdaq debut on Friday. The Nasdaq led the charge with a 1.3% gain, the S&P 500 added 0.8%, and the Dow tacked on more than 0.2% after Wednesday's mixed close. The South Korean memory giant is set to price its US offering Thursday with demand running at seven times the available shares — a powerful signal that investor appetite for AI-linked plays remains very much alive, even after the recent chip stock sell-off that rattled confidence in the broader AI boom.
Geopolitical tensions didn't disappear, but markets largely brushed them aside. The US launched airstrikes on 90 Iranian targets while Iran retaliated by striking targets in US-allied Middle Eastern countries — yet oil prices actually fell on the day, giving back some of Wednesday's big gains as traders priced in a bumpy but ongoing path toward some kind of resolution. On the macro side, weekly jobless claims showed little change from the prior week, keeping the interest rate debate simmering in the background. PepsiCo's latest results added a cautionary note, showing American consumers are tightening their belts amid economic worries — even as the beverage giant's revenue still managed to top expectations.
SPY Performance
SPY opened at $747.35 and wasted little time making a case for the bulls. After two straight sessions of grinding lower, buyers showed up with purpose early, pushing the ETF toward the high of $751.97 before a modest pullback pulled the session low to $745.59. That low held, and more importantly, it held without much of a fight — sellers couldn't sustain any meaningful pressure, and dip buyers kept stepping in to defend the tape every time it wobbled.
SPY closed at $751.71, up 0.85%, snapping the two-day losing streak and giving the bull camp something to work with heading into the next session. Volume came in at 39.31 million shares, still below average, so this wasn't a thunderous reversal fueled by heavy institutional conviction — but steady buying on a quiet tape is still buying, and the price action spoke clearly enough. The VIX dropped 6.27% to 15.84, unwinding a chunk of the fear that had been stacking up over the prior two sessions. That combination of higher prices and lower volatility is exactly the kind of one-two punch that tends to flip the narrative from defensive to constructive. The bulls answered the bell when it mattered, but with volume remaining subdued, the next test will be whether this move can attract real follow-through or whether it fades into just another bounce in a choppy tape.
Major Indices Performance
The Nasdaq led the charge on the day, jumping 1.3% in a session that finally gave growth and tech investors something to feel good about. After recent sessions that showed just how fragile momentum had become, this kind of move starts to suggest buyers are stepping back in with some conviction. It's not a one-day fix for all the technical damage that's been done, but it's the kind of green print that can shift sentiment in the near term if it gets followed up.
The Russell 2000 wasn't far behind, posting a solid 1.22% gain that's encouraging for market breadth. Small-caps have been one of the weaker corners of the market lately, so seeing them participate meaningfully in an up day is a healthy sign. These names are acutely sensitive to interest rate conditions, and with yields pulling back slightly, the relief showed up almost immediately in the small-cap space. Whether this is the start of a more sustained move or just a one-day bounce remains the real question.
The Dow brought up the rear with a 0.27% gain — still green, but clearly lagging the broader risk-on tone of the session. Blue-chip, value-oriented names tend to move more slowly when growth leads, and that's exactly what played out here. The S&P 500 also finished solidly higher on the day, confirming the rally had real breadth behind it. Overall, today's session had a notably different feel than recent weakness — leadership was cleaner, participation was broader, and the tone shifted in a more constructive direction across the board.
Notable Stock Movements
Meta stepped into the spotlight today, surging as much as 4.70% to lead the Magnificent Seven in what was a broadly green session for the group. That kind of move from Meta is a statement — it signals that investors are feeling good about the advertising cycle, AI monetization, or both, and they're willing to pay up for it. Meta has a way of going quiet for stretches and then reminding the market exactly why it belongs in this cohort, and today was one of those reminder days.
The broader Magnificent Seven picture was mostly green across the board, which is a clean reversal from the mixed-to-red tone the group had been carrying. The two exceptions were NVIDIA and Alphabet, with Alphabet dragging the low end down to -0.84%. It's a bit of a role reversal from recent sessions — NVIDIA, which has been the group's AI darling and consistent outperformer, took a backseat today while Meta ran. Alphabet's slip is worth noting too, as it suggests the market is still sorting out the competitive AI narrative and isn't treating all the big-tech names as interchangeable bets.
The overall group performance fits neatly with the broader risk-on tone that showed up across markets today. With the Russell 2000 gaining 1.22% and the Nasdaq up 1.3%, appetite for growth and higher-beta names was clearly back in play. The VIX dropping 6.27% to close at 15.84 reinforced that caution was getting dialed back, and that kind of environment tends to give the Magnificent Seven room to run. The fact that the gains were widespread within the group — rather than concentrated in one or two names — suggests this wasn't just a rotation story but a genuine broad-based re-engagement with mega-cap tech.
Commodity and Cryptocurrency Updates
Crude oil pulled back today, slipping 1.74% to close at $72.24, but don't mistake one down session for a trend reversal. The commodity is still well above $70 and the broader bid remains intact. Geopolitical tensions and tight supply conditions haven't gone away, and the market is still treating dips as buying opportunities rather than the start of something more serious. If crude finds its footing here and pushes back toward recent highs, the inflationary implications become harder for the Fed to ignore. Energy at these levels doesn't give policymakers much room to pivot, and a sustained presence above $70 keeps the restrictive policy conversation very much alive.
Gold bounced back convincingly today, gaining 1.54% to close at $4,134, erasing the prior session's losses and then some. After two straight down days, the dip buyers showed up exactly when you'd expect them to, which says something about the underlying conviction in this market. The fundamental drivers that pushed gold to historic levels — central bank demand, geopolitical uncertainty, and a murky rate outlook — remain firmly in place, and this recovery suggests the consolidation phase may already be wrapping up. The long-term setup continues to look constructive.
Bitcoin had a solid session, climbing 2.49% to close above $63,805 and extending its cushion above the psychologically important $60,000 level. After the modest pullback yesterday, today's bounce reinforces that the bulls are still in control of the near-term narrative. The $60,000 floor continues to hold with meaningful room to spare, and as long as that remains the case, the intermediate-term outlook for crypto stays constructive.
Treasury Yield Information
The 10-year Treasury yield closed at 4.540% today, pulling back 0.66% on the session but still holding above that critical 4.5% threshold. The dip is a mild positive — yields moving in the right direction is always welcome — but one down day doesn't erase the concern built up over the prior sessions. Staying above 4.5% means the headwind for equities remains intact, even if it eased slightly today. The bond market hasn't given the all-clear yet, and equity bulls shouldn't treat today's modest retreat as a signal to relax completely.
Within the framework, 4.540% keeps us in that uncomfortable zone where pressure on stocks is real but not yet severe. The next level worth watching is 4.8%, where selling in equities historically becomes more persistent and harder to shake. A move above 5% would represent a meaningful shift in the risk environment, and the 5.2% level carries the most serious implication — a 20% or greater correction. None of those danger zones are staring us down right now, but remaining above 4.5% for multiple sessions in a row is a pattern worth respecting.
The key question going forward is whether today's dip has legs or whether yields find support and push back toward 4.6% and beyond. Bulls need a convincing break back below 4.5% and ideally a sustained move toward 4.3% to meaningfully shift the narrative. Until that happens, the bond market continues to act as a ceiling on equity enthusiasm, and any rally in stocks should still be measured against the backdrop of yields that remain in pressured territory.
Previous Day’s Forecast Analysis
Thursday's forecast called for SPY to trade within a twenty-point range, with $732 as the downside anchor and $752 as the max upside target. The bias leaned modestly bearish given the put-dominated options environment and heavy negative gamma stacked around price, with Wednesday's close at $745.32 sitting near the middle of the projected range. The key level heading into the session was $748, identified as the gamma flip point — a clean reclaim of that level was required to shift structure bullish and open the door toward $750, the major call wall and round-number magnet, with $752 capping the range above. On the downside, $741 was flagged as the first warning sign, with $740 representing the strike where selling could truly accelerate. Below there, $738 and $735 were the next decision points, with $732 serving as the model's ultimate floor if support failed completely.
The trading strategy reflected the elevated VIX reading of 16.81 by recommending reduced position sizing at 75-80% of normal until volatility showed signs of reversing. Long entries were framed in the $743-745 zone, targeting $748-749 initially and $751-752 on a stronger push, with stops placed below $742. A reclaim of $747-748 on strong internals was identified as a momentum add opportunity targeting $751 and then $754-755, with trailing stops moved up to $745.32 to protect gains. On the short side, the $746-747 area was highlighted as a potential fade zone on weak internals, targeting $742-743 and then $739-740 on further deterioration. A sustained break below $743 opened secondary short entries targeting $740 with stops above $746. The overall message was disciplined and patient — wait for the level, keep stops in the 1.5-2% range, and respect the two-way risk that comes with a rising VIX environment.
Market Performance vs. Forecast
Thursday's session delivered a bullish tape that validated several of the framework's key structural calls. SPY opened at $747.35, right in the zone the model had flagged as the critical battleground between $746-748, and buyers immediately began working to reclaim the $748 gamma flip level the forecast had identified as the threshold for constructive price action. That reclaim happened with conviction, and the session's structure unfolded almost exactly as the bullish scenario the model outlined — a clean push through $748 opened the door toward $750, and price ultimately closed at $751.71 with a high of $751.97, pressing right up against the $752 max upside target the model had set as the ceiling of the expected range.
The long setup the forecast identified was precise. Entries in the $743-745 zone from Wednesday's close carried an initial profit target of $748-749 as the first leg, with a secondary extension toward $751-752 if conviction held — and Thursday delivered exactly that second leg. The session low of $745.59 held well above the $742 stop level outlined in the strategy, meaning risk management protocols were never stressed on the long side, and the trade had room to develop cleanly toward both profit targets. The model's directional bias, which leaned toward bulls reclaiming $748 as the key pivot, proved entirely correct as price never looked back after the open.
The VIX dropping 6.27% to 15.84 confirmed what the framework had anticipated as the bullish scenario — that a reversal in hedging demand would accompany a push toward the upper end of the range. The prior day's caution around 75-80% position sizing was a prudent posture given the elevated volatility environment at the time, and Thursday's session rewarded patience. The model defined the levels, identified the gamma flip trigger, and outlined the exact trade structure that played out — that's the framework doing its job, and it continues to provide the structural roadmap that keeps traders on the right side of price.
Premarket Analysis Summary
The premarket analysis posted at market open identified SPY spot at $747.23 sitting in a call-dominated environment, recovering from the prior session's put-dominated slide and reclaiming firmer footing overnight. The immediate gate above was set at $748 — described as the level where positive gamma builds decisively and the key upside tell for confirming the recovery. Above that, $750 was flagged as the heaviest concentration zone and major call wall acting as the primary magnet and battleground, with $752 as the next decision point, $753 marking resistance, and $754 capping the expected move top as max upside. The analysis was clear that buyers had reclaimed control overnight but that $748 needed to be cleared and held with conviction to unlock the pull toward $750. On the downside, $746 was the first level to watch just below spot, with a clean loss there threatening to stall the recovery attempt. Below that, $745 was flagged as where selling could accelerate, $744 identified as both a key battleground and the gamma flip level sitting in negative gamma territory, $742 as the next decision point, and $740 marking the bottom of the expected move and the ultimate floor backed by a significant put wall.
The actual session delivered a clean bullish resolution that validated the upside framework almost precisely. SPY opened at $747.35, immediately clearing the critical $748 gate early in the session and confirming the recovery signal the analysis had outlined. Price pushed to a session high of $751.97, reaching well through the $750 call wall target and briefly testing the $752 decision point before settling back. The close at $751.71 landed comfortably above $750, representing a strong hold of the magnet level the analysis had identified as the primary gravitational target. The downside levels were tested minimally, with the session low of $745.59 briefly tagging the $745 acceleration zone before buyers reasserted control. The gain of 0.85% and VIX dropping 6.27% to 15.84 were fully consistent with the call-dominated, recovering environment the premarket analysis had described.
Validation of the Analysis
Today's session delivered another sharp validation of the premarket framework, with SPY threading through the named levels in a way that rewarded anyone who came in prepared. The analysis opened with spot at 747.23 and immediately identified 748 as the defining gate — the level that needed to be cleared and held with conviction to unlock the move toward 750, where the heaviest call concentration and major call wall sat as the day's magnet. SPY opened at $747.35, essentially right on top of that tension zone, and the early session resolved exactly the way the premarket mapped it. Price pushed through the 748 gate and drove higher, eventually tagging a session high of $751.97 — stopping just shy of the 752 decision point the analysis flagged as the next level above 750. That's a clean two-handle run from the gate into the primary target zone, playing out almost to the tick.
The premarket also laid out the downside risks with precision. The analysis warned that 746 was the first level to watch below spot and that losing it cleanly would stall the recovery, with 745 the point where selling could accelerate. SPY's session low of $745.59 tested that exact corridor — dipping below 746 and touching just below 745 before buyers stepped back in, precisely the scenario the framework described as the line between stall and acceleration. That low held and price never threatened 744, the gamma flip level, confirming the recovery structure the premarket outlined overnight. SPY closed at $751.71, settling right in the call-dominated zone between 750 and 752, while the VIX dropping 6.27% to 15.84 confirmed the positive gamma environment the analysis described from the open. From the 748 gate clear to the 750 magnet and the precise test of the 745-746 support corridor, today's entire range was drawn on the map before the opening bell.
Looking Ahead
Friday's economic calendar is quiet with no high-impact releases on the docket, which gives traders a clean slate to use the session for positioning rather than reacting. After a week that included FOMC Minutes on Wednesday, the market has had time to digest the Fed's narrative, and Friday becomes less about data and more about how price action consolidates heading into the weekend.
Use Friday as a session to assess conviction — are the moves from earlier in the week holding, or are they starting to fade as participants square up positions? Quiet calendars can still produce meaningful tape, especially when the broader market is still processing a fresh Fed tone, so stay locked into your levels and let price be your guide rather than chasing noise.
Market Sentiment and Key Levels
The directional picture today shifts in favor of the bulls, though the conviction behind the move deserves some scrutiny. SPY gained 0.85% and closed near the top of its intraday range, which tells you buyers were in control for most of the session and didn't give much back into the close. The VIX dropping 6.27% to 15.84 is a meaningful signal — fear is retreating, and traders appear more willing to add risk than reach for hedges. Below-average volume of 39.31M is worth watching, because a rally that can't attract broad participation has a harder time sustaining itself. That said, the price action is constructive, and the broader tape supports the bulls in the near term. The Nasdaq surging 1.3% and the Russell 2000 climbing 1.22% tell you strength is spreading across market caps — this isn't a narrow one-sector story.
Key resistance sits at $751.97, today's intraday high that SPY essentially kissed before settling just a hair below it. A clean break above that level on expanding volume would be a strong signal that bulls are serious, and it could open the door to a push toward the $755 area. On the downside, $745.59 — today's session low — is the critical line in the sand. If SPY slips back below that with follow-through, the bears will reassert themselves quickly and this rally risks becoming nothing more than a one-day relief bounce. Gold jumping 1.54% to $4,134 and Bitcoin closing above $63,805 after a 2.49% gain confirm that risk appetite is alive and well across asset classes today. The 10-year yield easing slightly keeps some of the pressure off equity valuations, and crude pulling back 1.74% to $72.24 removes at least one inflationary headwind for now. The bulls have the short-term edge — $751.97 is the level that determines whether this rally has legs or stalls out right at the door.
Expected Price Action
Friday's session presents actionable intelligence generated by our AI model, with SPY projected to trade within a range anchored by $740 on the downside and $754 as the max upside target. That fourteen-point window signals the market will trend rather than consolidate, and with Thursday's close at $751.71 sitting near the top of the expected move, the bias leans bullish given the call-dominated environment and the decisive reclaim of the key $748 gamma flip level.
The defining level heading into Friday is $752, which the model identifies as the next meaningful decision point above current price. A clean hold above $752 keeps the bullish structure intact and opens the door toward $753, with $754 capping the range as the max upside and the expected move top. The heaviest call concentration remains centered around $750, which now flips from resistance to support — that level becomes the critical line in the sand for bulls. On the downside, $748 is the first level to watch closely — that's the gamma flip level that buyers spent all of Thursday reclaiming, and losing it cleanly on any early weakness would be a serious warning sign. Below $748, $746 becomes the next key battleground, and a break there could accelerate selling toward $745 and $744, where the gamma flip into negative territory sits. Below $744, $742 is the next decision point, with $740 serving as the model's ultimate floor and max downside. With VIX now cooling to 15.84 and the structure firmly call-dominated, the burden has shifted to the bears — holding $750 is the bulls' primary job, and any failure to defend that level on a pullback should be treated as a warning that Friday tests the lower end of this wide projected range.
Trading Strategy
The VIX dropping 6.27% to 15.84 is a meaningful shift in tone, signaling that options markets are dialing back near-term fear and that hedging demand has eased off after recent sessions of elevated uncertainty. At 15.84, the VIX is back in comfortable territory, and that gives bulls a cleaner runway to work with. The declining volatility read supports expanding position sizing back toward 85-90% of normal, as the risk backdrop has improved enough to justify adding exposure on quality setups. That said, below-average volume on the session means you can't lean on this move with full conviction just yet — lighter activity leaves the door open for a quick reversal if sentiment shifts, so respect your levels and don't abandon discipline simply because the tape looks friendly.
Long setups are well-supported here, with the $750-751 zone now acting as near-term technical support following the close near session highs. Entries in the $750-751 range carry an initial profit target of $754-755, with a secondary leg toward $758-760 if volume expands and market breadth confirms the move. Stops on longs belong below $748 — losing that level would suggest the late-day strength was a fade rather than a genuine breakout. In a rising market scenario, a clean hold above $751.71 on the open with expanding internals sets up a momentum add, with targets at $755 on the first leg and $759-760 if institutional buyers step in and push the tape with real conviction. Trail stops up to $749.50 as the trade develops to lock in gains and prevent a winner from turning into a loser.
Short setups are worth stalking near the $754-755 zone, where price would be running into overhead resistance from prior swing highs. A failed test of that area on weak internals or a rollover in advance-decline numbers sets up a clean fade, with initial downside targets at $750-751 and a deeper move toward $747-748 if selling picks up momentum. In a declining market scenario, a clean break and hold below $749 reopens short entries with targets at $746, stops placed above $752. With the VIX at 15.84 and pulling back, keep stop-loss parameters in the 1.5-2% range from entry, stay patient for the level rather than chasing intraday noise, and remember that low volatility environments can whipsaw aggressive short positions fast — the edge goes to the trader with discipline, not the one reacting to every tick.
Model’s Projected Range
SPY's projected maximum range for Friday is $746 to $757, with the Call side dominating in an expanding band that suggests trending price action with intermittent chop. Friday brings no economic news due out so the market will trade on technicals. SPY had a solid session, opening at $747.35, dipping to a low of $745.59 before pushing to a high of $751.97 and closing at $751.71, up 0.85% on the day, though volume came in lower than average. SPY is trading near our model's first support at $750, with ongoing optimism around U.S.-China trade negotiations continuing to provide a macro tailwind for equities. If price pushes higher and breaks through our model's first resistance at $755, the next target becomes $757, while a break below $750 support opens the door toward $746, and if that level fails to hold there is little to keep price from falling toward $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. Absent a catalyst, resistance sits at $755, $757, $759, $760, while support rests at $750, $746, $745, $740. With SPY closing right at $751.71 and hugging that first support level, we favor buying dips at $750 on any early weakness Friday. Bitcoin gained 2.49% to close above $63,805 and MAG stocks were mostly green across the board led by Meta surging up to 4.70%, with Alphabet being the lone laggard down to -0.84%, and that combination of crypto strength and broad tech participation supports the overall bullish tone heading into Friday. The VIX closed at 15.84, down 6.27%, suggesting a significant reduction in fear as traders grow more comfortable with the current market environment. SPY closed just above the lower line of the uptrend channel, with structural support reinforcing the $750 model level as the key line in the sand heading into Friday's session.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended in a Bullish Trending Market State with SPY closing at $751.71. Since SPY closed above MSI resistance, that resistance level at $748.37 now flips to become support heading into Friday. Extended targets were printing above at the close, confirming that bullish momentum remained intact and the trend had real conviction behind it. Extended targets were also active throughout the session, printing above during premarket, the AM session, the PM session, and into the close, giving traders a persistent signal that buyers were firmly in control all day long. The MSI rescaled higher overnight, opening the day in a wide bullish state with extended targets below keeping price near $744 in the early premarket hours. As the session progressed the MSI began rescaling higher with price grinding steadily upward through the morning session. At the open a sharp dip to $746 was quickly bought and the MSI began a series of rapid rescalings higher with extended targets above driving price from $746 all the way to $752 by midday. The MSI settled into a wide Bullish Trending state into the close with SPY holding well above what is now support. The moderate $1.56 spread reflects a market that is trending with purpose rather than churning, and with extended targets still printing above at the close, the MSI is forecasting a strong continuation higher for Friday with the bulls maintaining control and extended targets above suggesting upside momentum will persist. MSI support is $746.81 with resistance at $748.37.
Key Levels and Market Movements:
Wednesday we stated, "the narrow $1.99 MSI spread at the close suggests sideways consolidation for Wednesday with price likely to remain between $743 and $746 absent any new catalyst," and added, "Bulls want to see overnight price hold above $743.11 MSI support and use that level as a launching pad to press SPY back toward $745.10 resistance and beyond," while also noting, "if bulls can defend $743.11 with conviction and the MSI rescales into a Bullish Trending state with extended targets printing above, the sideways thesis gets shelved quickly." That is precisely what happened. The bulls not only defended $743.11 overnight but launched a sustained move that left Wednesday's entire MSI range far in the rearview mirror by midday Thursday.
The session began with the MSI opening in a wide bullish state with extended targets below anchoring price near $744 during premarket. Once those faded and the MSI began rescaling higher, the character of the session changed immediately. SPY opened at $747.35 and dipped sharply to a session low of $745.59 right at the open, a move that looked threatening but was quickly absorbed. That dip offered the first clean long setup for traders following the framework, buying the test of what would become MSI resistance-turned-support as the MSI confirmed the bullish structure in real time. Price snapped back aggressively and the MSI began a series of rapid rescalings higher with extended targets printing above the entire time, dragging price from $746 up toward $752 through the heart of the session. Each successive rescale created a new support level and a fresh entry opportunity for disciplined buyers, with the extended targets above confirming that momentum was not fading. SPY hit a session high of $751.97 and never meaningfully threatened that level with a sustained reversal. The PM session saw price hold its gains comfortably and the MSI locked into a wide Bullish Trending state into the close with SPY finishing at $751.71, up 0.85% on the day. Volume came in at 39.31M, below average, yet the move was clean and directional. The VIX dropped 6.27% to 15.84, further confirming that fear was leaving the market. At minimum it was a three-for-three 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:
Friday has light economic news but the wide bullish MSI with extended targets above suggests continuation higher is the most likely outcome. With the MSI in a Bullish Trending state, extended targets printing above at the close, and the moderate $1.56 spread giving price room to move, the path of least resistance into Friday is clearly higher. ISM Services PMI hits Monday which could begin influencing positioning by end of day Friday, but Friday itself offers a relatively clean tape for bulls to press their advantage.
Bulls want to see overnight price hold above $748.37, the former MSI resistance that now flips to support, and use that level as a base to push SPY toward $752 and potentially higher. If bulls can defend $748.37 with conviction and the MSI continues rescaling higher with extended targets printing above, the continuation thesis stays fully intact and dips become buying opportunities rather than warning signs. Any pullback to $748.37 that holds should be treated as a long setup targeting the premarket levels above, since with extended targets active there is no MSI ceiling constraining price in the traditional sense.
Bears want to see $748.37 fail to hold and press price back down toward $746.81 MSI support. If $746.81 gives way and the MSI rescales lower into a Bearish Trending state with extended targets printing below, Thursday's impressive rally would come under pressure and price could revisit the $744 area and lower. That said, bears face an uphill battle given the strength of the close and the persistence of extended targets above throughout the entire session. The highest-probability setup for Friday is buying dips to $748.37 support and targeting fresh highs above, with the MSI confirming trend continuation in real time. Failed breakdowns at $748.37 offer the cleanest long entries, and only a clean break below $746.81 with a confirmed MSI state change would shift the bias.
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 $753 to $767 and higher strike Calls, indicating the Dealers see a ceiling above for Friday. The ceiling for Friday appears to be $755. To the downside, Dealers are buying $749 to $685 and lower strike Puts in a 5:1 ratio to the Calls they're selling, displaying heightened concern that prices could move lower. Dealers are no longer selling ATM Puts, indicating limited conviction on direction for Friday. Below $749 is bearish and above $751 is bullish. Should SPY fail to hold $749, the zone from $743 to $749 will be choppy and full of false breakouts in both directions. Dealer positioning is unchanged at bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $753 to $775 and higher strike Calls for the week ahead. The ceiling for the week appears to be $758. To the downside, Dealers are buying $747 to $642 and lower strike Puts in a 4:1 ratio to the Calls they're selling, displaying heightened concern that prices could move lower. Dealers are selling ATM Puts broadly at $748 to $752 into next Friday, indicating the strongest bullish conviction we have seen in weeks. Dealers do not sell ATM Puts unless they believe there is a floor in the market at $748. There is a clear floor at $748 with major resistance at $753 to $758. Dealers appear fully committed to higher prices and are positioned to participate in a continuation of the current rally, setting up the market for further upside into mid-July. Remain bullish above $748 but below $746 and especially $742 we are 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 $751.71 and VIX dropping 6.27% to 15.84, the tape favors longs as long as price holds above $747. A pullback to that level is buyable — use it as your line in the sand with stops below $745.59. Shorts need patience here; don't fight a market trending higher with falling volatility.
Keep position sizes reasonable with the 10-year yield still sitting above 4.5% and volume running below average. 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!
