Market Insights: Monday, August 11th, 2025

Market Overview

US stocks started the week on uneven footing as traders weighed reports that President Trump granted another 90-day extension for steeper China tariffs and looked ahead to key inflation data. The Dow Jones Industrial Average slipped 0.45%, the S&P 500 eased 0.21%, and the Nasdaq lost 0.30% after giving back early gains. Markets were initially buoyed by news outlets including CNBC and The Wall Street Journal reporting the tariff delay until November 9, allowing negotiations with China more time to reach a firmer agreement. The additional tariffs had been scheduled to take effect Tuesday, so the postponement briefly steadied sentiment.

Last week, the Nasdaq capped two record-setting closes while the S&P 500 finished just shy of a new all-time high. Tech remained a focal point, with Apple coming off its strongest week since 2020 after a White House appearance alongside President Trump. Nvidia also ended Friday at a fresh record on signals it could sidestep some looming chip tariffs. In a fresh twist Monday, Trump confirmed Nvidia can sell its H20 chip to China in exchange for a revenue cut — a deal he stressed does not extend to its next-generation Blackwell chips. Reports indicated both Nvidia and AMD agreed to give the US government 15% of sales from certain chips to China in return for export licenses. That arrangement, while welcomed by the market with both stocks gaining intraday, has already drawn speculation of legal challenges given its unusual nature.

Tariff-related headlines continued to shape trading, with Trump reiterating his claim that the duties are delivering a “huge positive impact on the stock market.” Still, investors remain watchful for how these measures feed into inflation, with Tuesday’s CPI report, Thursday’s PPI, and Friday’s retail sales and consumer sentiment data on deck. Gold prices, which spiked last week on tariff confusion, moved lower after Trump clarified that the metal will not be subject to duties. The combination of policy shifts, sector-specific deals, and upcoming economic catalysts kept markets in a cautious, news-driven mode to open the week.

SPY Performance

SPY slipped 0.21% to close at $635.85 after opening at $637.49 and reaching an intraday high of $638.95. The ETF found support at $634.66 before settling just above that level into the close. Volume of 54.99 million shares came in below average, consistent with summer trading. The mild pullback kept SPY above key support and within striking distance of resistance near $640.

Major Indices Performance

Among the major indices, the Russell 2000 was the relative outperformer, slipping just 0.04% in a session where all benchmarks ended lower. The Nasdaq dropped 0.30% after early strength faded, pressured by profit-taking in mega-cap tech. The S&P 500 fell 0.21%, while the Dow Jones Industrial Average underperformed with a 0.45% decline, weighed down by weakness in industrials and financials. Market action reflected a cautious tone ahead of the CPI report, with traders selectively rotating within sectors rather than aggressively building new positions.

Notable Stock Movements

The Magnificent Seven saw red across the board except for Tesla, which jumped 2.87% on strong delivery expectations, and Netflix, which added 0.55%. Nvidia and AMD traded higher intraday on the revenue-sharing deal news before moderating, while Apple gave back a portion of last week’s outsized gains. The generally soft tone among mega-caps reinforced the day’s cautious sentiment, with only select names bucking the pullback.

Commodity and Cryptocurrency Updates

Crude oil rose 0.25% to $64.04, continuing to hover above our model’s longer-term $60 downside target. Gold tumbled 2.57% to $3,401 after the White House confirmed it will not be subject to tariffs, reversing part of last week’s rally on tariff uncertainty. Bitcoin gained 0.21% to close above $118,600, with crypto markets holding firm alongside broader equities.

Treasury Yield Information

The 10-year Treasury yield edged lower by 0.12% to 4.280%, staying comfortably below the 4.5% level that could pressure equities. The drop in yields offered a modest cushion to stocks, though a move toward 4.8% remains a potential warning signal for risk assets. The yield curve’s current positioning continues to allow equities room to breathe in the near term.

Previous Day’s Forecast Analysis

Friday’s forecast projected SPY to trade between $635 and $641 with a bullish bias above $635, eyeing resistance at $638, $640, and $645, with downside support at $635, $630, and $625. The strategy favored long trades above $635, with shorts only on failed breakouts near $640 or breaks below $635. Volatility was expected to remain low ahead of next week’s CPI release, with an emphasis on buying dips.

Market Performance vs. Forecast

SPY opened at $637.49, climbed to $638.95, then faded to a low of $634.66 before closing at $635.85, holding just above the key $635 support. The session respected the forecasted range, briefly challenging resistance but failing to sustain a breakout. This offered multiple tactical long setups early in the day and short opportunities as price retreated from the highs. The bias above $635 proved valid, as SPY never saw a decisive breakdown, reinforcing the effectiveness of the levels in guiding trades.

Premarket Analysis Summary

In today’s premarket analysis posted at 8:16 AM, SPY was trading at $638.35 with a bias level at $636.70. Upside targets were $640, $642, and $645, while downside targets sat at $638, $636.70, $634.20, and $630. The plan favored long trades above the bias level, expecting a gradual drift higher if early selling did not materialize. A sustained break below bias would have shifted focus to the downside.

Validation of the Analysis

The bias level at $636.70 proved pivotal. SPY held above it in early trade, pushing toward the $640 target zone before fading in the afternoon. While the move lacked sustained momentum, the analysis correctly identified key inflection points, and traders could have taken advantage of both the morning rally and the midday reversal. The day’s action reinforced the accuracy of the bias level and upside targets, even in a low-energy session.

Looking Ahead

Tuesday’s CPI release will be the week’s primary catalyst, with traders expecting volatility around the data. Wednesday brings no scheduled economic releases, while Thursday’s PPI and unemployment claims and Friday’s retail sales and sentiment data round out the week. Inflation trends will heavily influence September Fed policy expectations.

Market Sentiment and Key Levels

SPY sits at $635.85, keeping bulls marginally in control above the $634–$635 support zone. Resistance remains at $640, $643, and $645, while deeper support lies at $630 and $621. A breakout above $640 could open a path to retesting all-time highs, while a decisive break below $630 would give bears room to push toward $621. Sentiment is cautiously bullish into CPI, with traders ready to adjust positioning quickly on the data.

Expected Price Action

Our AI model projects SPY to trade between $632 and $641 on Tuesday, an actionable range that points to choppier, two-way trade with potential for trending moves post-CPI. The bias remains higher above $635, but a break below $634 could shift momentum toward $630 and $621. Sustained strength over $640 would put $645 in play. Traders should prepare for heightened volatility immediately after the inflation print.

Trading Strategy

Long setups remain favored above $635, targeting $640, $643, and $645, with stops tightened into resistance. Shorts can be considered on failed breakouts near $640 or confirmed breaks under $634, targeting $630 and $621. With the VIX at 16.25, volatility is still low, but Tuesday’s CPI could change that quickly. Position sizing should remain moderate, and stops should account for potential post-data whipsaws.

Model’s Projected Range

The model projects SPY’s maximum range for Tuesday between $629 and $642.50, with the Put side dominating in an expanding range, suggesting trending price action punctuated by consolidation. Overnight, markets were virtually unchanged amid light summer volume, and by the open SPY traded just below $638, holding steady until favorable China tariff news sparked a midday push to the day’s highs. Those highs faded quickly, with SPY sliding lower for the rest of the session before a late-afternoon recovery attempt lifted it to close at $635.92, holding above this critical support level. SPY continues to test the all-time-high region but faces consistent selling pressure around $640; since reclaiming $585, the index has maintained a strong uptrend with dips consistently bought, momentum likely to persist unless weakness emerges in leading names or a major external catalyst interrupts the move. With Nvidia and AMD both higher today, leadership remains intact. A close above $635 leaves little in the way of new all-time highs in the coming days, with resistance at $640, $643, and $645, and the $638–$645 zone expected to offer strong resistance. Support lies at $634, $630, and $621, with a break below $630 risking a swift drop to $621. Overnight, bulls will likely defend $632, aiming for a push toward $640 on favorable CPI data; a pause or reaction there could set up a break of the prior all-time high toward $641, followed by consolidation or a minor pullback before targeting $645 later in the week. For bears to gain traction, a decisive move below $630 is essential, and as long as SPY holds above this level, dip-buying is expected to continue, paving the way for fresh highs. While seasonal volatility from August through October tends to favor bears, they remain sidelined as bulls dominate the broader narrative, with SPY trading above the lower bounds of the bullish channel from the April lows. Meanwhile, the VIX rose 7.26% to 16.25, still supportive of the bullish backdrop, and we continue to recommend hedging long equity exposure with VIX calls in anticipation of higher volatility into the fall. A VIX below 23 remains supportive of equities, but the current contango structure suggests heightened volatility risk. A breakout above 23 could trigger the 5–10% pullback we’ve been anticipating. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a Bearish Trending Market State, with SPY closing at MSI resistance. No extended targets printed into the close, but they did print late in the day prior to the close which saw price drop quickly in the last hour. Overnight the MSI remained in a wide bullish state which rescaled higher on favorable China tariff news. But after 2 pm the MSI began a series of rescalings lower to a bearish state. These were all quite narrow and as such, without extended targets below, the market moved mostly sideways until just before the close which saw SPY dip and recover to once again close above $635. With the MSI in a narrow bearish state at the close, its likely overnight the market drifts slightly lower but not far from the current levels prior to CPI. We recommend watching the MSI after CPI is introduced in the premarket and trade what you see. MSI support is currently $634.75 with resistance at $635.85.
Key Levels and Market Movements:
On Friday, we wrote that “our model favors the bulls following the close above $635, with no consideration for the bears,” adding that “the MSI remains in a Bullish Trending Market State, and we expect SPY to push toward $640,” and noting that “as long as $635 holds, upward momentum is expected to persist.” With this context and the MSI still in a wide Bullish Trending Market State at the open, the focus was on finding a long on any pullback or failed breakdown. A less-than-perfect failed breakdown at 10:45 a.m. at $636.75 triggered our long entry, with a first target at the premarket level of $638, just above MSI resistance. Price moved sideways for about an hour until a delay in China tariff news hit, sending SPY sharply higher and securing T1. We then set T2 at another premarket level of $640, and as SPY moved just below $639 with an extended target above, it seemed $640 was within reach until a failed breakout at that level and the disappearance of the extended target prompted us to exit and reverse short at the then-current MSI resistance of $638.92. By the time the short was entered, price was $638.50, so T1 was set at the next premarket level of $636.70, which hit before 2 p.m., prompting a T2 at MSI support of $636. A dip to that level before 3 p.m. led us to move our stop to breakeven and trail; however, the price action on the dip formed a textbook failed breakdown, so we opted to close the short at $636 and call it a day. We did not reverse long, as the MSI had printed an extended target below, and while SPY did pop afterward, it ultimately fell into the close. Finishing by 3 p.m. with two solid trades, we started the week strong, thanks to a clear plan, disciplined execution, and tight alignment between MSI’s directional cues, our broader market model, and key technical levels. The MSI remains a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Tuesday’s CPI release means anything can happen, and there is little edge in making predictions ahead of such a significant economic report. That said, we continue to favor the prevailing long trend, buying dips as long as price holds above $630. A failure at $630 could trigger a drop toward $621, though buyers are likely to step in along the way, particularly near $625. Without knowing how CPI will land, tomorrow is a “trade what you see” day, using these levels as guides rather than hard triggers while watching the MSI closely, as its real-time updates are especially valuable in high-impact sessions. Absent an external catalyst, our model still favors the bulls following a close above $635, with new all-time highs in play, though a pullback toward $625 remains possible and would likely be bought, setting the stage for another push higher. For bears to regain control, a decisive break of $630 is needed, which could open the door to $625 as a short-term floor, while a confirmed break below $600 would materially shift the outlook and raise the risk of a 9–10% correction. The MSI remains in a Bearish Trending Market State, yet we expect SPY to push toward $640, with a new all-time high possible this week. As long as $635 holds, upward momentum should persist; focus on long setups above $630, while shorts may be considered on a break below $625 or on a push above $640, with increased two-way action anticipated during the session. As always, failed moves remain among the highest-probability setups. Stay nimble, avoid trades during Ranging Market States, and ensure full alignment with MSI. Providing real-time insights into market control, momentum shifts, and actionable levels, the MSI when integrated with our Pre-Market and Post-Market Reports continues to sharpen execution precision and elevate trade quality. If you haven’t yet integrated MSI and our model levels into your process, now is the time. Contact your representative to get started as these tools are designed to support consistency and enhance performance.

Dealer Positioning Analysis

Summary of Current Dealer Positioning:
Dealers are selling SPY $638 to $655 and higher strike Calls while also buying $636 to $637 Calls indicating the Dealers desire to participate in any rally on Tuesday. Dealers are no longer selling near the money Puts. The ceiling for Tuesday appears to be $645 although $640 will also provide material resistance. To the downside, Dealers are buying $635 to $575 and lower strike Puts in a 3:1 ratio to the Calls/Puts they’re selling/buying continuing to display little concern that prices could move much lower on Tuesday. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.
Looking Ahead to Friday:
Dealers are selling SPY $638 to $655 and higher strike Calls while also buying $636 to $637 Calls indicating the Dealers desire to participate in any rally later this week. Dealers are no longer selling near to the money Puts. The ceiling for the week appears to be $650 although $645 also poses material resistance. To the downside, Dealers are buying $635 to $575 and lower strike Puts in a 5:1 ratio to the Calls/Puts they’re selling/buying, reflecting a bearish outlook for next week. For the week Dealer positioning is unchanged from bearish to bearish. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly and tracking them is essential for staying ahead of shifting market sentiment.

Recommendation for Traders

With SPY holding above $635, bulls retain an edge into Tuesday’s CPI, but resistance at $640 remains a key hurdle. Long setups above $635 targeting $640, $643, and $645 remain attractive, while shorts can be considered on failed breakouts near $640 or confirmed breaks under $634 toward $630 and $621. The VIX at 16.25 reflects low volatility, but traders should stay nimble with CPI ahead. Always review the premarket analysis before 9 AM ET for the latest model adjustments and Dealer Positioning updates.

Good luck and good trading!