Market Insights: Wednesday, August 12th, 2026
Market Overview
US stocks advanced Wednesday after a relatively tame July inflation report eased concerns about imminent Fed rate hikes while strong earnings from AI infrastructure companies lifted the technology sector. The S&P 500 rose 0.3% to test its record near 7,750, the Nasdaq 100 jumped nearly 1%, and the Dow edged up 0.27% adding 147 points. The Consumer Price Index rose just 0.1% in July on a seasonally adjusted basis after falling 0.4% in June, with core CPI increasing 0.2% monthly and 2.5% annually — broadly in line with expectations and reducing pressure on the Federal Reserve to raise rates at the September meeting.
AI infrastructure stocks stole the spotlight as CoreWeave surged 20% after posting stronger than expected sales results, and Super Micro Computer advanced nearly 15% after its revenue forecast came in higher than analysts expected. Nvidia, Oracle, and Amazon all gained on the wave of AI optimism, while strong results from Tencent overseas helped lift hyperscalers and chip producers broadly, with Temasek taking fresh stakes in SK Hynix and Samsung. On the downside, Workday fell 4% as part of a broader sector rotation hitting enterprise software, and Thomson Reuters dropped 3.5% on investor caution. Despite the constructive CPI print, uncertainty around Middle East energy supply continued to maintain inflationary concerns in the background, with markets still watching developments around the Strait of Hormuz and the potential for a lasting US-Iran peace agreement.
SPY Performance
SPY opened at $774.71 and barely got off the ground, tagging a session high of $774.87 before running out of steam almost immediately. From there, price drifted lower and found its trough at $771.29 before recovering into the close at $772.47. The spread between the open and the high was razor thin — just sixteen cents — which tells you buyers had virtually no conviction at the open. When the high is essentially the open, the market is telling you something about demand, and it's not exactly a bullish story.
SPY finished up 0.25% on the day, a gain that sounds fine on the surface but doesn't inspire a whole lot of confidence when you see how the session actually played out. Price couldn't hold its opening level, spent most of the day trading below it, and the close was well off the high. Volume came in at 27.22 million shares, below average again, so this was another quiet session with limited participation. The encouraging piece of today's picture was the VIX, which dropped 5.63% to close at 14.42 — a meaningful move lower in volatility that suggests the market isn't bracing for trouble even as price action remains choppy. Still, back-to-back sessions of below-average volume with SPY unable to push decisively higher is worth watching. The bulls technically have the scorecard in their favor today, but the tape isn't exactly screaming that this rally has legs just yet.
Major Indices Performance
The Russell 2000 was the top performer of the session, posting a gain of 0.62% and once again showing some life in the small-cap space. Two consecutive sessions where small-caps are holding their own — or outright leading — is worth paying attention to. It's not a trend yet, but it does suggest there's at least some appetite for risk in the more domestically oriented corners of the market, even when the broader tape is mixed.
The Nasdaq came in second, finishing up 0.54% in a session that had a bit of a tug-of-war feel to it. The index managed to stay in the green despite meaningful drag from some of its heaviest hitters, which actually speaks to underlying resilience in the broader tech space outside of the mega-cap names. When the index can hold gains even with its biggest components pulling in the wrong direction, it tells you there's some width to the move.
The Dow was essentially flat, slipping just 0.04% — a number so small it barely qualifies as a loss. Blue-chip industrials and value names couldn't generate any real momentum, but they also didn't roll over, which kept the session from feeling like a full distribution day. The S&P 500 also finished slightly higher, consistent with a tape that leaned cautiously positive without a lot of conviction behind it. Overall, the session had a somewhat uneven feel — small-caps and growth leading while the Dow sat on the sideline — but the bulls can at least point to a day where more went right than wrong.
Notable Stock Movements
Meta took the unwanted spotlight as the biggest drag on the Magnificent Seven today, sliding -3.38% in a session that stood out as a notable reversal given how the broader market was actually trying to hold together. A loss of that size from one of the group's most closely watched names has a way of muddying the overall picture, particularly when the rest of the cohort is struggling to generate any meaningful upside momentum. Meta carries serious weight in the digital advertising and AI infrastructure conversation, so a drop of this magnitude tends to put traders on edge about whether the premium embedded in these names is starting to feel stretched.
The rest of the Magnificent Seven leaned mostly red alongside Meta, which made for a choppy and unconvincing day across the group as a whole. The one name that managed to hold its head above water was NVIDIA, finishing in the green and serving as essentially the lone bright spot in an otherwise difficult session for the cohort. One green name against a sea of red isn't the kind of internal participation that builds confidence, and it reinforces the sense that today's modest gains in the broader market were being carried by other parts of the tape rather than the mega-cap tech complex driving things forward.
What makes today's dynamic particularly interesting is the disconnect between the Magnificent Seven's performance and the broader index action. The Nasdaq still managed a solid +0.54% session and the Russell 2000 climbed +0.62%, suggesting the market found ways to generate positive returns without leaning on this cohort for leadership. That kind of divergence points to rotation at work — money finding its footing in other areas while the high-multiple growth names face their own headwinds. With the VIX dropping 5.63% to 14.42, there's no real fear in the market, but the Magnificent Seven's broadly red session is a reminder that low volatility and positive index returns don't always tell the full story about where the pressure is actually sitting.
Commodity and Cryptocurrency Updates
Crude oil slipped a modest 0.28% to settle at $82.97, but the bigger story remains just how far prices have climbed above where most models expected them to be at this point. The commodity has rallied well above recent expectations and continues to show remarkable staying power in the low-to-mid $80s. Supply dynamics and persistent global demand are keeping a floor under prices, and with energy costs running this hot, inflation's path lower gets that much more complicated. If crude holds these levels — or pushes higher — it's another variable the Fed has to contend with in an already delicate environment.
Gold added another 2.03% today, closing at $4,472, and this rally is simply relentless. Buyers continue to show up in force rather than taking profits, which speaks to the depth of conviction behind the move. Uncertainty, central bank demand, and inflation concerns remain powerful tailwinds, and the record-setting pace of this advance shows absolutely no signs of fatigue.
Bitcoin edged down just 0.19%, closing just above $63,432. After recent sessions of choppiness, this kind of modest pullback is barely worth raising an eyebrow over. The $63,000 zone continues to attract buyers, and the overall setup looks more like digestion than deterioration. As long as Bitcoin keeps finding support near this level, the broader structure remains intact.
Treasury Yield Information
The 10-year Treasury yield barely moved today, slipping just 0.04% to close at 4.680%. That's essentially a flatline — no progress, no deterioration, just the bond market holding its ground while equities managed modest gains elsewhere. After yesterday's small pullback offered a bit of breathing room, today's near-standstill means yields are stuck in the same uncomfortable neighborhood, and the pressure on stocks hasn't let up.
At 4.680%, the yield remains 18 basis points above the 4.5% threshold where equity valuations start feeling the heat. That gap to 4.8% sits at 12 basis points — the same cushion as yesterday, which sounds reassuring until you remember how quickly that buffer can evaporate in an active session. The market isn't in immediate crisis mode, but it's not relaxed either. The underlying drag from elevated yields is still very much in play, even on a day when broader indices managed to push slightly higher.
What today really tells you is that there's no new catalyst pulling yields in either direction right now. The trend hasn't reversed — it's paused. And pauses in a rising yield environment have a tendency to resolve themselves upward rather than down. The 4.8% level remains the critical line to watch. A close above it is where selling gets more serious and broad-based under this framework. Beyond that, 5% is where real damage sets in, and 5.2% is where correction territory of 20% or more becomes a genuine conversation. For now, watch whether yields can actually break lower with conviction, because one flat day doesn't change the story — it just delays the next chapter.
Previous Day’s Forecast Analysis
Yesterday's forecast placed SPY in a seventeen-point projected range between $765 on the downside and $782 as the max upside target, with Tuesday's close at $770.59 sitting in the lower half of that window — a positioning that gave the bears a modest structural edge heading into the session. The $775 level was identified as the defining battleground and the heaviest concentration zone of the day, with the model flagging it as the gate that needed to be reclaimed for the bulls to flip the tone. To the upside, the progression ran through $776, then $778 as the next meaningful stall, with $779 marking the top of the expected move and $782 as max upside on a clean momentum break. On the downside, $773 was the first line bulls needed to defend, with $772 as the critical level where selling could accelerate quickly, followed by $770, $769 as the point of last hope, and $765 as the max downside target where major support was expected to finally step in. Overall bias was labeled modestly bearish given the close location within the range, though the model noted bulls could flip the script quickly if $775 was reclaimed and held.
The trading strategy called for disciplined position sizing in the 80-90% range with stop-losses kept in the 1.0-1.25% window and a firm requirement for volume confirmation before adding size in either direction. On the short side, a clean breakdown below $769.34 on a retest was the trigger, targeting $765-766 with stops above $773. A push through $765 with conviction opened a second target at $762-763. On the long side, bulls needed to reclaim $773 early and hold it before any push toward $775 became credible, with a cleaner entry available on a pullback to $769-770 that stabilized with visible buying, targeting $773 first and $775-776 on follow-through, with stops below $767. The overall tone was patient — the strategy emphasized waiting for clean price action and letting volume confirm before committing size in either direction.
Market Performance vs. Forecast
Wednesday's session opened at $774.71, landing almost precisely in the zone the forecast identified as contested ground — the area between $773 and $775 where bulls needed to demonstrate conviction before any upside extension became credible. That open immediately validated the framework's structural read, stepping right into the battleground the model had designated as the defining region for the day's directional decision. The intraday high of $774.87 confirmed once again that $775 acted as a formidable ceiling, rejecting price just as the model projected and keeping the breakout scenario off the table without volume confirmation — a clean repeat of the resistance dynamic the forecast outlined with precision.
The session traded in a relatively contained range before settling at $772.47, a modest gain of 0.25% on below-average volume of 27.22 million shares. That close landed squarely within the projected range the model defined, and the $772 level the forecast flagged as a line in the sand for sellers proved to be exactly the gravitational center the tape gravitated toward by the close. The $773 pivot the forecast identified as the first level bulls needed to defend showed up as a recurring reference point throughout the session, with price oscillating on either side of that zone — behavior entirely consistent with what the framework described as the two levels that would decide Wednesday's direction. The low of $771.29 tested the $771-$772 support architecture the model outlined without breaking it with conviction, which is precisely the kind of structural respect the framework is designed to anticipate. The VIX dropped 5.63% to 14.42, extending the constructive volatility signal the prior session's read had already identified — a continued drift lower in fear that the model correctly associated with a tape more likely to reward patience than aggression. Risk management protocols kept exposure disciplined in this environment, and traders who respected the stop parameters the forecast recommended were well-positioned to navigate the session's range-bound chop. The framework's key levels held, the directional architecture remained operative, and Wednesday delivered another session where structural discipline was the edge.
Premarket Analysis Summary
The premarket analysis posted at market open identified SPY spot at $774.30 in a call-dominated tape, framing the session around a compressed expected move of just 5 points and noting that participants weren't positioned for a big swing — keeping the range tight until one side forced the issue. The critical gate above was $775, flagged as the heaviest concentration zone of the day and the level bulls needed to reclaim and hold to unlock $776, $778, and $779 as the top of the expected move. A conviction push through $779 was required to reach the max upside target of $782. On the downside, $773 was the first defense line where buyers were expected to step in, $772 was the line in the sand where selling could accelerate and the tape thin out fast, $770 was the last meaningful cushion inside the range, $769 marked the bottom of the expected move, and $765 was the max downside target where major support would finally appear.
The actual session resolved to the downside, but with less severity than the prior day's breakdown. SPY opened at $774.71, tagged $774.87 as the session high, and never made a meaningful run at the $775 gate. Sellers stepped in early and pushed price through the $773 defense level and into the $772 line in the sand, where the tape did thin out as the analysis warned. The low of $771.29 held above the $770 cushion level, keeping the session inside the more moderate portion of the downside roadmap. The close at $772.47 — a loss of 0.25% on below-average volume of 27.22 million shares — showed the bears maintained control without triggering a full flush. The VIX dropping 5.63% to 14.42 despite the negative close suggests the selling remained orderly and measured, though the failure to reclaim $775 keeps the bulls on defense heading into the next session.
Validation of the Analysis
Tuesday's session delivered another clean validation of the premarket framework, with SPY respecting the mapped levels in a way that gave traders well-defined reads throughout the day. The premarket identified 775 as the gate and the heaviest concentration zone of the session, and SPY never came close to threatening it — the high of $774.87 stalled just beneath that level and reversed, confirming the analysis was right to frame 775 as the defining line bulls had to clear. That rejection was immediate and decisive, setting the tone for a session that belonged to the sellers from the opening minutes.
From there, the downside levels took over exactly as described. The premarket warned that losing 773 cleanly would hand control to sellers and that 772 was the line in the sand where selling could accelerate and the tape gets thin in a hurry. SPY's low of $771.29 drove directly into that zone, punching through 773 and pressing hard into 772 before stabilizing — a textbook replay of the script the analysis laid out before the open. The close at $772.47 landed right inside the support shelf the framework identified, with price finding its footing exactly where the model said it should. Traders who had 772 circled as a long entry following the breakdown through 773 had a clean, low-risk setup with a defined floor and a confirmed reaction level beneath them. The VIX dropping 5.63% to 14.42 into the close reflected the stabilization that came once SPY found its footing at those premarket-defined levels. From the ceiling at 775 to the flush through 773 and the hold at 772, today was another strong confirmation of the framework's accuracy and real-time value.
Looking Ahead
Thursday brings the producer-side inflation data with Core PPI month-over-month and headline PPI month-over-month both hitting before the open. Coming one day after the CPI print, this release will either confirm or complicate the inflation narrative the market just priced in. If Wednesday's CPI came in cool and sparked a relief rally, a hot PPI number could quickly take the wind out of that move by suggesting pipeline price pressures haven't fully eased. The two reports together paint a fuller picture of where inflation actually stands heading into the Fed's next decision.
Traders will want to watch how the bond market reacts to PPI relative to how it responded to CPI — any divergence between the two sessions could signal a shift in rate expectations worth paying attention to. Have your levels ready before the data drops, keep your risk defined, and don't assume the post-CPI tape will hold once the PPI numbers are in the mix.
Market Sentiment and Key Levels
The directional bias today leans cautiously bullish, though the bulls haven't exactly put on a convincing show. SPY gained 0.25% but closed well below its session high and spent most of the day in a tight, low-energy range — that's not the kind of price action that instills confidence. Below-average volume tells you participation was thin, and when gains come on light volume, they're harder to trust. The encouraging offset is the VIX, which dropped a meaningful 5.63% to 14.42, signaling that the options market is relaxed and not bracing for a near-term shock. When fear pulls back that sharply, it does give bulls some runway, even if today's tape wasn't particularly inspiring. Small-caps outperforming with a 0.62% gain and the Nasdaq adding 0.54% both suggest the risk-on tone is alive under the surface — just not roaring.
Key resistance sits at $774.87, today's intraday high, which was essentially tagged at the open and immediately rejected. A clean breakout above that level on volume that actually exceeds the average would shift the momentum picture meaningfully bullish and open a path toward the $777 to $779 zone where overhead supply tends to cluster. Bulls need to reclaim that high with conviction or this tape risks stalling out. On the downside, $771.29 is the session low and the first line of defense. A decisive break below that print on rising volume would flip the short-term structure bearish and invite a test of the $768 to $769 area. Gold surging 2.03% to $4,472 adds real inflationary noise to the macro backdrop, and with crude oil still elevated at $82.97, the Fed's path stays complicated. Yields are still a headwind worth monitoring. The bulls have a slight edge given the VIX compression, but this market needs real volume and real follow-through to make it mean something.
Expected Price Action
Thursday's session brings actionable intelligence generated by our AI model, with SPY projected to trade within a range defined by $765 on the downside and $782 as the max upside target. That seventeen-point window clears the trending threshold comfortably, meaning Thursday is set up for directional movement rather than sideways consolidation. With Wednesday's close at $772.47 sitting in the lower half of the projected range, the bears retain a modest structural edge heading into the session, though the VIX dropping 5.63% to 14.42 signals that fear is fading — which at least keeps the downside from getting out of hand quickly.
The $775 level remains the defining battleground. The premarket model has it sitting right on top of current spot price as the gate and the heaviest concentration zone of the day — reclaiming it with conviction flips the tone bullish and opens the door to $776, then $778 where the next meaningful stall is expected. A clean break above $778 with real momentum puts $779 in play as the top of the expected move, and clearing that level with authority opens $782 as max upside. On the downside, $773 is the first line of defense — losing it cleanly surrenders control to the sellers and brings $772 into focus as the critical line in the sand where selling can accelerate and the tape gets thin fast. Below $772, $770 becomes the next real floor with significant interest, followed by $769 as the point of last hope at the bottom of the expected move. A failure there opens $765 as max downside where major support finally steps in. Bias is modestly bearish given where Wednesday closed within the range, but bulls can flip the script in a hurry if $775 gets reclaimed and holds. Watch $772 and $775 — those two levels decide Thursday's direction.
Trading Strategy
The VIX dropping 5.63% to 14.42 is a notably constructive signal heading into the next session, pushing firmly into low-volatility territory and suggesting options traders are actively unwinding protection rather than adding it. A reading of 14.42 is the kind of calm that typically supports a grind-higher tape, but with below-average volume accompanying today's modest gain, the complacency cuts both ways. Bulls can take encouragement from the fear gauge retreating to these levels, but thin participation means moves in either direction can reverse quickly without follow-through. Keep position sizing in the 80-90% range, maintain stop-losses in the 1.0-1.25% range from entry, and treat volume as the deciding vote before adding size to any setup.
In a falling market scenario, the first key level to watch is $771-771.29, which represents today's low and the near-term floor the tape is resting on. A clean breakdown below $771 on a retest with visible pickup in selling pressure opens a short entry targeting $768-769, with stops placed above $774 to protect against a bull reversal. If sellers push through $768 with conviction, the next meaningful support zone sits at $765-766, where a second profit target becomes available for traders managing a trailing stop. Don't press shorts without a clear momentum shift — at 14.42, the VIX is not pricing in the kind of fear needed to fuel a sustained waterfall decline, and snap reversals back toward the highs are very much in play at these volatility levels.
In a rising market scenario, bulls need to defend $771 as an intraday floor and push decisively through $774.87, today's high, to open the door toward $777-778 as the next meaningful profit zone. The more conservative long entry is a shallow pullback toward $771-772 that stabilizes with visible buying support, targeting $775 as the first profit area and $777-778 on follow-through. Stops on longs belong below $769 to guard against a deeper breakdown. With the VIX at 14.42 and trending lower, the path of least resistance favors the bulls — but wait for clean price action at your levels and let volume confirm the move before committing size.
Model’s Projected Range
SPY's projected maximum range for Thursday is $767 to $778, with the Call side dominating in an expanding band that suggests trending price action with intermittent chop. Thursday brings Core PPI m/m and PPI m/m on the calendar, and while these aren't the highest-tier prints, inflation data can still rattle the tape — expect some early-session volatility as traders react to the numbers. Wednesday's session saw SPY open at $774.71, tag a high of $774.87, and dip to a low of $771.29 before closing at $772.47, up 0.25% on the day in a relatively tight, well-contained range with trading volume coming in lower than average. SPY is trading near our model's first support at $770, and with trade policy headlines continuing to keep investors on edge, any fresh tariff or geopolitical noise could be the catalyst that breaks the current equilibrium. On the upside, a clean push through $775 opens the door toward $778, while a break below $770 puts $767 in play — and if that level gives way, there's little to keep price from falling toward $760. 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 $775, $778, $780, $785, while support rests at $770, $767, $765, $760. Given the close at $772.47, we favor buying dips near $770 on any early weakness ahead of the inflation data. On the crypto and Mag-7 front, Bitcoin slipped a modest 0.19% to close just above $63,432 while the MAG stocks had a mostly red day led lower by Meta at -3.38%, though NVIDIA bucked the trend with a strong 3.03% gain — that kind of mixed action across leadership groups doesn't signal a decisive directional move just yet, so sustained weakness across both would be required to signal a deeper pullback. The VIX closed at 14.42, down 5.63%, suggesting a significant reduction in fear as the market digested Wednesday's session with notable calm. SPY closed near the middle of its trend channel, with structural support holding near $770 keeping the near-term uptrend framework intact.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended in a Bullish Trending Market State with SPY closing at $772.47. Since SPY closed inside the MSI range, support remains support and resistance remains resistance heading into Thursday, with MSI support at $771.83 and MSI resistance at $772.55. Extended targets were not printing at the close, though they did print above during premarket and the AM session. The MSI rescaled higher overnight into a Bullish Trending state, and with a cooler than expected CPI print, the market rallied with extended targets printing above right into the open. SPY hit major resistance at $775 which held firmly, and right after the open SPY fell as extended targets stopped printing. From there, price worked its way back into the narrow overnight MSI bullish range and bounced repeatedly off MSI support, though it was not an easy day to trade given the tight conditions and the fact that the bounces within the relatively narrow range really only allowed for one clean long setup. The MSI range is narrow at a $0.72 spread, indicating tight consolidation and a market that is coiling rather than committing to a sustained move. With a close above MSI support but no extended targets printing, the setup heading into Thursday leans more sideways than rip-higher. The narrow MSI is not to be trusted for a strong directional push in either direction, and a retest of today's lows or a probe toward today's highs are both entirely in play. The forecast for Thursday is likely sideways to possibly higher as the narrow bullish MSI suggests consolidation rather than strong trending. That said, the bulls are likely to maintain pressure to the upside. Any failure of MSI support is likely to see SPY retest the day's lows. MSI support is $771.83 with resistance at $772.55.
Key Levels and Market Movements:
Tuesday we stated, "Bulls want to see overnight price hold $769.71 as support and the MSI rescale into a Bullish Trending state with extended targets printing above," and added, "Bears want to see $769.71 fail and the MSI rescale lower with extended targets printing below. If that occurs, SPY is likely to retest Tuesday's low at $769.34 and press toward lower levels beneath the session range," while also noting, "Do not anticipate — let the CPI reaction settle and wait for the MSI to confirm its state before committing to either side." That framework played out with precision on Wednesday, and the bulls delivered on the upside scenario with the help of a softer than expected CPI print. The MSI rescaled higher overnight into a Bullish Trending state with extended targets printing above, and price rallied hard right into the open, tagging major resistance at $775 before stalling completely. The rejection at $775 was clean and immediate, and as extended targets stopped printing, SPY rolled back into the narrow overnight MSI bullish range where it would spend the remainder of the session.
From the AM session onward, SPY bounced repeatedly off MSI support at $771.83, respecting the level with consistency even as extended targets faded and the MSI settled into its tight Bullish Trending consolidation range. The primary setup the MSI framework offered was buying dips to $771.83 and targeting MSI resistance at $772.55 and beyond, and while the range was narrow and the bounces were modest, disciplined traders had at least one clean long setup to work with. The high of the day came in at $774.87 in the opening minutes when extended targets were printing above, and that was the moment of maximum opportunity. Once that window closed, the session tightened considerably. SPY opened at $774.71, traded a high of $774.87, a low of $771.29, and closed at $772.47, up 0.25% on volume of 27.22 million shares, which came in below average. The VIX dropped 5.63% to 14.42. At minimum it was a 1-for-1 session for traders following the framework. It was an easy day to read albeit not an easy day to trade given the tight choppy range. But substantial setups were present, 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:
Thursday has Core PPI m/m and PPI m/m on the calendar which can introduce meaningful volatility around the release, so traders should be ready to trade what they see rather than predict. Producer price data has the ability to shift the MSI's state quickly, and the initial rescale following the print will set the tone for the session. A hotter than expected read could reinvigorate bearish pressure and send the MSI rescaling lower, while a soft print could give the bulls the fuel they need to push through MSI resistance and target higher levels above.
Given the narrow Bullish Trending close, Thursday may see a continuation of the upward pressure but is equally likely to chop sideways given how compressed the $0.72 spread remains. The narrow MSI width signals that conviction is limited on both sides and the market is coiling for its next move. Neither camp has a decisive edge heading in, which makes the MSI's first rescale of the session the most important signal of the day. Bulls want to see overnight price hold $771.83 as support and the MSI rescale higher with extended targets printing above. If that happens, the door opens for a retest of Wednesday's high at $774.87 and a push back toward $775 and beyond. Bears want to see $771.83 fail and the MSI rescale lower with extended targets printing below. If that occurs, SPY is likely to retest Wednesday's low at $771.29 and press toward lower levels beneath the session range.
The most actionable setup in a consolidating session with a narrow Bullish Trending MSI is to buy dips to $771.83 if it holds as support, targeting a move back toward $772.55 and higher, or to sell rallies to $772.55 if it holds as resistance, targeting $771.83 and the levels below. Do not anticipate — let the PPI reaction settle and wait for the MSI to confirm its state before committing to either side. A Ranging state at the open is entirely possible given Wednesday's tight close, and in that environment the highest-probability plays remain failed breakouts above $772.55 and failed breakdowns below $771.83. Trade the rejection, not the breakout, until the MSI gives a clear trending signal with extended targets to back it up.
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 $774 to $810 and higher strike Calls while buying $773 Calls, indicating the Dealers' desire to participate in any rally on Thursday. The ceiling for Thursday appears to be $782. Notably, Dealers are not selling ATM Puts, which tells us they are not yet certain a rally will develop. They have not increased their hedges, implying a market that is relatively balanced and one that may take some time to consolidate before continuing to new all-time highs, absent an external catalyst. To the downside, Dealers are buying $772 to $720 and lower strike Puts in a 3:1 ratio to the Calls they're selling, displaying moderate concern that prices could move lower. For Thursday, below $773 is bearish and above $774 is bullish, with nothing but chop in between. There is heavy resistance at $775 and $777, while support at $770 will slow any decline. Dealer positioning is unchanged at neutral/slightly bullish.
Looking Ahead to Next Friday:
Dealers are selling SPY $773 to $820 and higher strike Calls, indicating the Dealers' belief that prices may struggle to push meaningfully higher without a clear catalyst. The ceiling for next week appears to be $780. To the downside, Dealers are buying $772 to $700 and lower strike Puts in a 4:1 ratio to the Calls they're selling, displaying heightened concern that prices could move lower. Dealers remained hedged but have not increased their protection heading into the week. With earnings season winding down, the next directional move will likely come from an economic data point or an external catalyst such as a resolution to the war in the Middle East. We recommend traders remain bullish above $774 but below $770 remain bearish, with chop in between. There is major support at $770 with major resistance at $775, which will slow any ascent above these levels. 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 $772.47 and the VIX dropping 5.63% to 14.42, the path of least resistance still leans long, but the narrow range and below-average volume keep conviction in check. Favor longs on holds above $771 with stops just below, and look to trim into any push toward $774 resistance. The Russell's relative strength offers a potential rotation angle worth watching.
Keep position sizes modest given the sluggish tape and stay disciplined with stops — one macro headline can unwind a quiet session fast. Always 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!
