Market Insights: Monday, August 24th, 2026
Market Overview
US stocks closed mixed on Monday as tech and semiconductor names dragged the S&P 500 down about 0.3% and the Nasdaq roughly 0.8%, while the Dow managed a 0.3% gain to stand as the only major index in the green. The semiconductor sector took the hardest hit after a weekend report revealed Nvidia plans to raise prices on some of its AI servers, pulling down memory chip names like Sandisk and Micron in the process.
Treasury Secretary Bessent followed through on his promised press conference, unveiling "Operation Economic Outcast" — an expanded sanctions campaign designed to sever every economic lifeline to Iran. Any country that continues doing business with Iran risks being cut off from the US dollar system, a warning that clearly has China in its sights given its role as the top buyer of Iranian oil. The market barely flinched at the announcement, though the geopolitical tension it adds to an already complicated US-China relationship is hard to ignore. That news landed on top of a US-Canada trade breakdown over the weekend, with Trump threatening to raise tariffs on Canadian autos, auto parts, and steel to 50% starting January 1, 2027, sending General Motors and Ford shares lower as Prime Minister Carney vowed to retaliate. All eyes now turn to Wednesday, when Nvidia reports earnings in what could be the most consequential moment yet for the AI trade.
SPY Performance
SPY opened at $764.78 and struggled to find any meaningful traction right out of the gate. The high of $765.22 came early and offered little in the way of upside momentum, with buyers failing to push price anywhere near the prior session's range. From there, the tape drifted lower, carving out a low of $762.08 before settling at $763.54 into the close. That's a $3.14 spread from low to high — an even tighter range than yesterday's already-compressed session, which tells you the market is coiling rather than committing to a direction. Price closed in the lower portion of the day's range, which is never a great look for the bulls.
SPY finished down 0.28% on the day, a modest decline but one that erases the prior session's bounce and raises questions about whether that recovery had any real staying power. Volume came in at 29.36 million shares, well below average, meaning neither side showed up with conviction. Low-volume declines can be brushed off as noise, but when you pair a negative close with VIX rising 4.69% to 15.84, the picture gets a little harder to ignore. Volatility climbing while price slips is the kind of combination that keeps bulls on edge. SPY is still churning in a tight band without a catalyst to break it one way or the other, and until volume picks up and the VIX backs off, this market is sending more questions than answers.
Major Indices Performance
The Dow outperformed the other major benchmarks today, managing a modest 0.26% gain in an otherwise downbeat session. That's a notable sign of defensive rotation — when the Dow holds green while growth-heavy indices are sliding, it tells you investors are gravitating toward stability and quality over risk. Blue-chip names provided something of a safe harbor today, and the relative strength there suggests institutional money was selective rather than broadly cautious.
The Russell 2000 dropped 0.65%, which isn't surprising given the backdrop. Small-caps remain highly sensitive to any shifts in rate expectations and investor sentiment, and when the mood sours even slightly, these names tend to feel it first. After the brief relief rally seen in the prior session, today's pullback is a reminder that small-cap bulls are still fighting an uphill battle in this environment.
The Nasdaq led the losses among the major indices, falling 0.76%. Growth and tech-adjacent names bore the brunt of today's selling pressure, dragging the Nasdaq to the bottom of the leaderboard. The S&P 500 also finished in the red, consistent with the broadly negative tone. The split tape — Dow green, everything else red — points to a market that isn't in full-on panic mode but is clearly in a risk-off mood. Investors are being picky, and right now, picky means favoring steady over speculative.
Notable Stock Movements
Meta took the spotlight today as the clear standout in the Magnificent Seven, surging as much as 1.66% to lead what was otherwise a mixed and mostly cautious session for the group. When the cohort's biggest mover is a mega-cap platform name like Meta pushing to the upside on a day where the broader tape is under pressure, it tells you that selective risk appetite hasn't completely evaporated — investors are still willing to own quality growth names that have a clear earnings story, even when the macro mood is uncomfortable.
The Magnificent Seven as a group had a mostly green day across the board, which is somewhat surprising given the broader softness in the market today. The exceptions were NVIDIA and Tesla, with Tesla pacing the laggards by dropping as much as -3.83%. That's a sharp reversal for a name that was leading the entire cohort higher just a session ago, and it's a reminder of how quickly sentiment can shift in the high-beta names. Tesla giving back ground this aggressively after yesterday's impressive run is the kind of whipsaw that keeps momentum traders honest and makes trend-following a difficult game in this environment.
What today's performance signals for broader market sentiment is somewhat conflicted. A mostly green showing from the Magnificent Seven while the major indices are selling off suggests there's still underlying support in the names institutional money tends to favor — but Tesla's sharp reversal and NVIDIA's continued relative weakness are threads worth pulling on. These two names carry enormous narrative weight around AI and growth sentiment, and when they're lagging while the VIX is climbing, it adds a layer of caution to any optimism the rest of the group is trying to generate. The cohort hasn't been able to string together consecutive coordinated upside days, and until that changes, every green session from this group carries qualifications.
Commodity and Cryptocurrency Updates
Crude oil pulled back 2.32% on the session but still settled at $85.04, keeping energy prices in territory that continues to give policymakers headaches. The selloff takes a bit of the edge off recent strength, but the bigger picture hasn't changed — black gold has rallied well above recent expectations and one down session doesn't constitute a trend reversal. Supply dynamics, global demand resilience, and geopolitical tensions remain the structural forces keeping crude elevated, and with prices firmly above $70, the inflationary math stays messy. A sustained move above that threshold was always the line in the sand for Fed policy complications, and at current levels, energy is still very much contributing to that pressure.
Gold added another solid gain, climbing 1.84% to close at $4,709. The metal continues to grind higher with impressive consistency, and today's move keeps the momentum firmly intact. Central bank demand, macro uncertainty, and inflation concerns remain the structural pillars underpinning this rally, and buyers keep showing up with conviction rather than waiting for meaningful dips. The bull case for gold remains as compelling as ever.
Bitcoin posted a modest but respectable gain of 1.04%, closing just below $78,563. It's not the explosive type of session crypto bulls love, but steady upside is still upside, and the overall tone remains constructive. Buyers continue to show patience and conviction, and nothing in today's session suggests the broader momentum is fading. Bitcoin remains in control, and the path of least resistance continues to point higher.
Treasury Yield Information
The 10-year Treasury yield finally gave back some ground today, pulling back 0.72% to close at 4.700%. After two consecutive sessions of upward pressure, that retreat is a welcome development — but one session of relief doesn't erase the trend that's been building, and 4.700% is still deep inside uncomfortable territory.
The good news is that the yield moved in the right direction. The bad news is that it only moved 4 basis points further from the 4.8% danger line. That threshold — where this framework calls for accelerating selling and more serious market damage — is still just 10 basis points away. The cushion is slightly better than yesterday's razor-thin 6 basis points, but it's still not a margin anyone should feel comfortable with. One piece of inflation data or one poorly received Treasury auction could close that gap in a single session.
At 4.700%, yields remain 20 basis points above the 4.5% level where equities begin feeling real strain. The fact that stocks are navigating this range without a more dramatic breakdown is notable, but it doesn't mean the pressure has lifted — it means the market is tolerating it, for now. The 5% level, where the pain becomes genuinely difficult to ignore, sits 30 basis points out, and the 5.2% correction territory remains further still. Both feel less distant than they did two weeks ago.
What matters now is whether today's pullback has legs or whether it was simply a one-session exhale before yields resume their climb. A sustained move back toward 4.65% would give equities meaningful breathing room. But until yields break convincingly below 4.5%, the ceiling on any rally remains low, and the risk remains tilted toward the upside in yields — which means the downside for stocks is never far away.
Previous Day’s Forecast Analysis
Yesterday's forecast projected SPY trading within a $759 to $773 range, a fourteen-point window that the model flagged as trending territory with directional conviction expected in either direction. The bias leaned modestly bullish heading into Monday's session, supported by Friday's close sitting in the upper portion of the lower half of the range and the VIX declining 5.62% to 15.11, signaling that fear was being wrung out of the market and hedging pressure was unwinding.
The defining line was $767 — reclaiming and holding that level cleanly was the condition needed to keep the bullish repair thesis intact, with $768 as the immediate follow-through target, $770 as the heaviest overhead concentration and expected stall point, $772 as the level bulls truly needed to establish a legitimate floor, and $773 capping the max upside. On the downside, $765 was the first line of defense sitting just beneath Friday's close, with a clean break there described as potentially ugly in a hurry. Below that, $764 was the structural floor for the week, $762 was the point of last hope for buyers, and $759 represented the bottom of the expected move.
The recommended strategy called for position sizing in the 70-80% range with stops in the 0.75-1.0% band from entry, emphasizing patience over aggression given the low-volume, low-fear environment. On the long side, the preferred entry was a successful retest of the $765-766 area, with an initial target of $767.85 and a stretch goal of $770 on volume confirmation. Stops on longs were placed below $763. On the short side, a clean break below $764.17 was the trigger, targeting $761-762 as the primary destination and $758 as the secondary if sellers found conviction, with stops above $767.
Market Performance vs. Forecast
Monday's session opened at $764.78, landing almost exactly at the forecast's key battleground zone between $765 and $767 — the very area the model had identified as the pivot that would decide the day's direction. The projected range had defined $759 on the downside and $773 on the upside, and Monday's actual range of $762.08 to $765.22 sat entirely within that window, confirming the framework contained the full session without getting stretched. Price never made a serious run at the upside targets, but the model's downside structure held up well — $762 had been called out explicitly as the point of last hope where buyers needed to show up, and that level acted as the session floor almost to the dollar.
What the model got right was the directional caution embedded in the setup. The forecast had flagged $765 as the first line of defense, and Monday's high of $765.22 essentially kissed that level before sellers reasserted control — exactly the kind of failed reclaim attempt that the trading strategy had warned about. The falling market scenario had outlined a short entry on a clean break below $764.17 targeting the $761-762 zone, and Monday's low of $762.08 reached directly into that primary profit destination. Traders who respected the short framework and covered into those support levels executed the plan as drawn up. Risk management protocols protected capital for anyone who kept stops appropriately sized in the 0.75-1.0% band. The VIX rising 4.69% to 15.84 was a modest shift rather than a shock, and while the bullish bias from Friday's volatility compression didn't materialize, the model's acknowledgment that the $765-767 zone needed to hold before committing to the long side kept disciplined traders from overcommitting. The framework accurately mapped the session's key levels, and Monday is another reminder that reading the break rather than anticipating it is what the strategy is built for.
Premarket Analysis Summary
The premarket analysis posted at market open identified SPY spot at $765.94 in a call-dominated tape, marking the first real shift in tone after four straight sessions of selling pressure. The expected move had widened to seven points, signaling participants were bracing for larger swings than seen all week. The defining level of the day was $767 — flagged as the gate sitting just above spot and the line separating another leg lower from a genuine repair attempt. Upside targets were set at $768, $770, $772, and $773, with $770 identified as the heaviest concentration overhead where price would want to stall, $772 as the level bulls needed for a clean floor heading into next week, and $773 standing as the max upside cap on the expected move. On the downside, $765 was the first level to watch sitting right beneath spot and flagged as the site of the heaviest battle of the day, $764 was identified as the immediate floor holding the week's structure together, $762 was the point of last hope where buyers should step in, and $759 stood as max downside at the bottom of the expected move. The analysis noted that with spot pinned between $765 and $767, the first clean break would decide the day.
The actual session resolved to the downside. SPY opened at $764.78, already below the $765 battleground level flagged as the critical first line, immediately signaling bears had control before the first print was even on the tape. The high of $765.22 barely nicked back above $765 but never mounted any meaningful challenge toward the $767 defining level, leaving every upside target untouched. Price then faded, dipping to $762.08 on the low — arriving at the point-of-last-hope level the analysis flagged as where buyers should step in — and buyers did show up there just enough to keep $759 max downside out of play. The close at $763.54 for a loss of 0.28% settled below the week's structural floor at $764, a bearish resolution that confirmed the downside scenario the premarket outlined as the likely outcome of losing $765 cleanly. The VIX rising 4.69% to 15.84 stood in direct contrast to the call-dominated bias identified premarket, suggesting the overnight optimism never translated into real session conviction and bears quietly won the Friday grind.
Validation of the Analysis
Friday's session validated the premarket framework clearly, though the resolution came on the downside rather than the upside — and every key level called before the open played its role with precision. SPY opened at $764.78, immediately below the 765 level that the premarket flagged as the first critical support and the site of the heaviest battle of the day. The analysis was direct: losing 765 cleanly could get ugly fast. The open itself confirmed that breakdown, and the tape never reclaimed it — the high of $765.22 barely grazed that level before sellers reasserted control, a textbook rejection at a level that was clearly mapped hours before the market opened.
From there, the downside roadmap played out step by step. The premarket identified 764 as the immediate floor and the level holding the week's structure together — price sliced through it without much of a fight, validating the warning that a clean loss of 765 would accelerate selling. The low of $762.08 drove straight into the 762 zone called out as the point of last hope where buyers should step in, and that's exactly what happened — buyers absorbed the flush right there and price stabilized, producing the close at $763.54 just above that level. The entire trading range from open to low was contained within the downside framework that was laid out before a single share traded. The VIX rising 4.69% to 15.84 confirmed the elevated tension the premarket implied by noting the expected move had widened and that participants were bracing for larger swings. Traders who respected 765 as resistance after the open, leaned short into 764, and covered into the 762 level had a fully structured session with clean entries and defined risk at every step of the way.
Looking Ahead
Tuesday's economic calendar is quiet, with no high-impact releases on the schedule to jolt the market in either direction. That puts the focus squarely on price action itself — how traders respond to Monday's session and whether any directional conviction carries over into the open. Without a data catalyst to lean on, Tuesday becomes the kind of tape-reading day where market internals and sentiment do most of the talking.
With no macro headlines to drive the narrative, Tuesday is really a positioning session ahead of whatever the back half of the week brings. Watch for follow-through or fading from Monday's moves, and pay attention to whether buyers or sellers are willing to step in with size in the absence of a fresh story. A quiet calendar can cut both ways — it either gives the trend room to breathe or exposes just how thin the conviction behind it really is.
Market Sentiment and Key Levels
The directional bias today leans cautiously bearish, though the damage was contained enough that bulls haven't completely lost the wheel. SPY slipped 0.28% on below-average volume of 29.36M shares, which tells you this wasn't a conviction selloff — more of a drift lower without strong participation. That said, the VIX rising 4.69% to 15.84 is a yellow flag worth watching. Fear is creeping back into the market, and if that reading continues to climb, it could start weighing on sentiment in a more meaningful way. The split tape didn't help the mood either — the Dow managing a gain while the Nasdaq and Russell 2000 both sold off points to a market that's rotating defensively rather than advancing with broad confidence.
Key resistance sits at $765.22, today's intraday high. A clean move back above that level on expanding volume would signal that bulls have reclaimed the short-term narrative and could set up a run at higher ground. On the downside, $762.08 — today's intraday low — is the line in the sand that matters most right now. If SPY breaks below that on meaningful volume, the selling could accelerate quickly and drag the index into a more uncomfortable spot technically. Gold surging 1.84% to $4,709 and Bitcoin climbing 1.04% to close just below $78,563 are keeping some risk appetite alive in the broader market, which could provide a floor for equities if that momentum spills over. Yields edging slightly lower are a modest tailwind, but not enough on their own to flip the script. Bears have a slim edge here, but low volume on the decline means bulls still have a chance to answer back.
Expected Price Action
Tuesday's session brings actionable intelligence generated by our AI model, with SPY projected to trade within a range defined by $759 on the downside and $773 as the max upside target. That fourteen-point window puts this squarely in trending territory, meaning participants should expect directional conviction rather than a grind — price has room to move with purpose in either direction and likely will. With Monday's close at $763.54 sitting in the lower portion of the projected range and the VIX rising 4.69% to 15.84, fear is quietly creeping back in and bears carry a modest structural edge heading into Tuesday's open.
The $767 level remains the defining line that separates genuine repair from another leg lower. Reclaim and hold $767 cleanly and $768 comes quickly, with $770 standing as the heaviest overhead concentration and where price should want to stall. Above that, $772 is the level bulls truly need — a clean hold there would put a legitimate floor under the market and shift the near-term tone meaningfully. Beyond that, $773 caps the expected move top as max upside and the ceiling bulls must clear to change the broader narrative. On the downside, $765 is the first level to respect and sits just above Monday's close, meaning any early weakness that breaks $765 cleanly could accelerate fast. Lose $765 and $764 becomes the immediate floor holding this week's structure together. Under $764, $762 is the point of last hope where buyers need to show up, and failure there opens the door to $759 at the bottom of the expected move. Bias leans modestly bearish given Monday's close in the lower portion of the range and the uptick in fear, but spot is pinned tightly between $765 and $767 — the first clean break out of that zone decides the direction of Tuesday's session.
Trading Strategy
The VIX rising 4.69% to 15.84 is a quiet but meaningful warning shot — fear is creeping back into the market, and that uptick in volatility on a session where the broad tape showed modest softness tells you hedging activity is picking back up. At 15.84, the VIX is still well within the low-anxiety zone historically associated with orderly price action, but the directional move higher in volatility is worth respecting. When the VIX ticks up on below-average trading volume, it often signals that the path of least resistance is starting to tilt toward caution rather than complacency. Keep position sizing dialed back to the 60-70% range given the mixed signals — the VIX is not screaming danger, but it's not giving the all-clear either. Maintain stop-losses in the 0.75-1.0% band from entry, and resist the urge to chase either direction until volume confirms a decisive move.
In a rising market scenario, bulls need to reclaim $765 and hold it with conviction before getting excited about the upside. The preferred long entry is a clean retest and hold of the $763.50-764 zone on any early weakness, with the initial profit target at $765.22, the session high, and the stretch target at $767.85 if buyers can generate meaningful follow-through. Stops on longs belong below $762 to protect against a failed recovery without taking on excessive drawdown. With the VIX nudging higher and breadth showing mixed signals under the surface, this is a grind-and-confirm environment — only add to long exposure when volume expansion accompanies the price move, not before.
In a falling market scenario, the critical floor to watch is $762.08, which marked the session low. A decisive break below that level on renewed selling pressure opens the door to a short entry targeting the $759-760 zone as the primary profit destination, with $757 as the secondary target if sellers gain conviction and volume begins to build. Stops on shorts belong above $765 to keep risk clearly defined. If the market opens soft and quickly rolls through $762 without finding a recovery bid, treat that as confirmation to initiate shorts with measured size. Cover into support levels rather than pressing the move aggressively, and don't let the still-moderate VIX reading at 15.84 breed false comfort — a VIX trending higher has a way of accelerating quickly when the tape turns decisively.
Model’s Projected Range
SPY's projected maximum range for Tuesday is $759 to $768, with the Put side dominating in an expanding band that suggests trending price action with intermittent chop. Tuesday brings no economic news due out so the market will trade on technicals. SPY closed at $763.54, down 0.28%, after trading in a fairly tight range with a high of $765.22 and a low of $762.08, opening at $764.78 and drifting slightly lower into the close on lighter-than-average volume. SPY remains in the $760 to $765 range that has defined recent trading, with ongoing trade policy uncertainty continuing to act as a ceiling on risk appetite. If the first resistance at $765 breaks, the next target is $766, while a break of first support at $760 opens the door to $759, and if that level fails there is little to keep price from falling toward $750. 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 $765, $766, $768, $770, while support rests at $760, $759, $755, $750. We favor shorting rallies near $765 given SPY closed just below that level with sellers defending the upper end of the range. Bitcoin edged higher by 1.04% to close just below $78,563, while MAG stocks were mostly green led by Meta up as much as 1.66%, though Tesla dragged on the group with a loss of as much as 3.83%, making for a mixed leadership picture where crypto showed quiet strength but tech internals remain uneven. The VIX closed at 15.84, up 4.69%, suggesting elevated fear given the subdued price action and light volume heading into a technical-only session. SPY closed near the middle of its recent trend channel, with structural support holding near $760 keeping the near-term setup from turning outright bearish.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended in a Bearish Trending Market State with SPY closing at $763.54. SPY closed inside the MSI range, which means $763.1 remains support and $764.1 remains resistance heading into Tuesday. Extended targets were not printing at the close, though they were visible during the premarket, AM session, and PM session, all printing above, which at various points in the day gave bulls a reference for potential upside recovery but ultimately failed to change the broader bearish tone. The MSI rescaled lower overnight into a narrow bearish state, and then rescaled lower again in the premarket where extended targets printed above, signaling to experienced MSI readers that a rough session was setting up. By the open the MSI had widened its range and extended targets printed above sporadically, indicating that while price was falling, it was unlikely to collapse far below MSI support. Sure enough, around midday the MSI rescaled higher into a Ranging state, a state we do not favor trading, before eventually returning to a Bearish Trending configuration and sending price back to test MSI support once more. The $1 spread at the close is extremely narrow, indicating tight consolidation and a market that is coiling rather than expressing strong directional conviction in either direction. The MSI is forecasting a session that is likely sideways to possibly up as the narrow bearish MSI suggests consolidation rather than strong trending. That said, the bears are likely to maintain pressure to the downside. Any failure of MSI support is likely to see SPY retest the day's lows. MSI support is $763.1 with resistance at $764.1.
Key Levels and Market Movements:
Friday we stated, "Bulls want to see overnight price hold above that level and the MSI rescale into a Bullish Trending state, which would open the door to testing higher levels and potentially printing extended targets above once again," and added, "If instead the MSI remains in a Bearish Trending state at the open and $765.42 fails to hold, selling any rally back toward that level and targeting $763.24 below becomes the preferred trade," while also noting, "The bears are likely to maintain pressure to the downside, and any meaningful recovery attempt needs to be confirmed by the MSI before trusting it." That framework proved precise and set traders up well for what unfolded across Monday's session.
The MSI rescaled lower overnight and again in premarket, arriving at the open in a Bearish Trending state with extended targets printing above, which told traders that while selling pressure was present, the downside below MSI support was unlikely to be explosive. SPY opened at $764.78, quickly pushed to a high of $765.22, and then began to slide as bears maintained control and the market drifted toward the lower end of the session range. The extended targets printing above in the premarket and early morning gave a read on the potential for brief upside pops, but price continued to press lower throughout the AM session, offering clean setups for traders selling resistance and targeting MSI support. By midday the MSI had rescaled higher into a Ranging state, which is a configuration we do not favor trading, and that shift effectively neutralized the clean directional flow the morning had provided. Price ground sideways in tight fashion during this period, making it difficult to extract additional edge. When the MSI returned to a Bearish Trending state later in the session, price once again tested MSI support, giving traders another shot at a clean setup on the short side. SPY traded a high of $765.22, a low of $762.08, and closed at $763.54, finishing the day down 0.28% on volume of 29.36 million shares, which came in below average and reflected the low-conviction summer tape. The VIX rose 4.69% to 15.84, reflecting a modest pickup in anxiety that aligned with the day's quiet but persistent bearish pressure. At minimum it was a 3-for-3 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:
Tuesday has light economic news so the market is likely to move more sideways than trend given the Bearish Trending at the close. But with such a narrow range it is also likely the MSI rescales overnight and a short squeeze ensues which will push price back to test higher levels. The MSI is closing in a Bearish Trending state with a $1 spread, which is about as narrow as it gets, and that kind of compression typically signals that price is coiling for a larger move rather than settling into a sustained directional grind. The absence of high-impact catalysts on the calendar means the market will largely be left to sort itself out, and without an external push it is more likely to chop than trend with authority. That said, with SPY closing at $763.54 and the potential for a Turnaround Tuesday setup, the possibility of at least an attempt to test Friday's highs is on the table if SPY can find traction and clear $764.1.
Bulls want to see overnight price hold above $763.1 and the MSI rescale into a Bullish Trending state, which would open the door to testing $764.1 above and potentially pressing toward Friday's highs if extended targets begin printing above. If the MSI confirms that shift overnight and $763.1 holds as support, buying dips toward that level and targeting $764.1 and above becomes the preferred approach for Tuesday. Bears, on the other hand, want to see $763.1 fail to hold overnight, which would put renewed pressure on the session's low at $762.08 and open the door to lower levels beneath the current range. Any failure of MSI support at $763.1 is likely to see SPY retest the day's lows quickly, so that level deserves close attention at the open.
The most actionable setup in a narrow Bearish Trending MSI without extended targets at the close is to respect both sides of the range and let the MSI confirm its state before committing to a direction. If the MSI rescales higher overnight into a Bullish Trending state and $763.1 holds as support, buying dips toward that level targeting $764.1 above is the preferred trade for Tuesday. If instead the MSI remains in a Bearish Trending state and $763.1 fails at the open, selling any rally back toward that level and targeting the session's prior lows becomes the cleaner setup. A Ranging state at Tuesday's open is also entirely plausible given the tight close, and in that environment failed breakouts above $764.1 and failed breakdowns below $763.1 offer the highest-probability setups. The bears are likely to maintain pressure to the downside, but the narrow MSI spread means that pressure may not have the energy to follow through without a fresh catalyst confirming the move.
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 $773 to $786 and higher strike Calls while buying $764 to $772 Calls, indicating the Dealers' desire to participate in any rally on Tuesday. The ceiling for Tuesday appears to be $771, making it unlikely prices move significantly higher than today's close absent an external catalyst. Notably, Dealers are no longer selling ATM Puts, a position that cost them today, leaving no defined floor heading into Tuesday. To the downside, Dealers are buying $763 to $705 and lower strike Puts in a 4:1 ratio to the Calls they're selling, displaying heightened concern that prices could move lower. Below $765 is bearish and above $766 is bullish with everything in between expected to be choppy and trap filled. Should SPY fail to hold $762, support has thinned and lower prices are likely. Above $768 the door opens to $771, which will act as a ceiling and contain price. Dealer positioning is unchanged at bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $768 to $795 and higher strike Calls while buying $764 to $767 Calls, indicating the Dealers' desire to participate in any rally into Friday. The ceiling for next week appears to be $774. Dealers are not selling any ATM Puts, telling us they have no defined floor heading into the end of next week. To the downside, Dealers are buying $763 to $725 and lower strike Puts in a 4:1 ratio to the Calls they're selling, displaying heightened concern that prices could move lower should support give way. Notably, Dealers have not added to their hedges, implying they continue to believe dips are buying opportunities. Remain bullish above $766, but below $765 the posture shifts bearish with chop in between. 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 $763.54 and VIX rising 4.69% to 15.84, the tape leans cautious. Favor longs above $765.22, with stops below $762.08. A failure to reclaim that level keeps the short bias intact.
Size down given below-average volume and rising volatility. 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!
