Market Insights: Wednesday, August 28th, 2025
Market Overview
Stocks pushed higher Thursday with the S&P 500 crossing the 6,500 mark for the first time, as investors responded to better-than-expected GDP data and moved past Nvidia’s earnings. The Nasdaq led gains with a 0.65% climb, while the S&P 500 rose 0.4% to another all-time high. The Dow added 0.2%, also hitting a record. Second-quarter GDP came in at 3.3%, a strong surprise from the earlier 2.8% estimate and a major rebound from Q1’s contraction. The uptick was fueled by a drop in imports, rebounding consumer demand, and continued economic resilience, while jobless claims dipped again, indicating strength in the labor market. Nvidia’s report was digested with some caution with shares ending lower after disappointing data center sales and renewed concerns about China’s AI market. CEO Jensen Huang emphasized continued demand for AI chips and hinted at renewed momentum in China. Meanwhile, headlines swirled around the Federal Reserve after Governor Lisa Cook filed a lawsuit against President Trump for her attempted removal, testing the central bank’s independence. With inflation data due Friday, markets may stay active despite many traders heading into the long weekend.
SPY Performance
SPY climbed 0.36% to close at $648.93, notching yet another all-time high after peaking at $649.48 intraday. The ETF opened above its prior record at $647.21, dipped to $645.34 mid-session, and was quickly bought, highlighting the persistent strength of dip buyers. Volume came in at 57.45 million, slightly below average but higher than the prior day, showing continued participation despite the late-summer lull. With SPY now firmly above the $647 level, bulls remain in control, and traders are watching for a clean breakout toward $650 and beyond.
Major Indices Performance
The Nasdaq led Thursday’s advance with a 0.65% gain, driven by strength in tech and AI-related names. The S&P 500 followed with a 0.4% rise, crossing 6,500 for the first time and securing its second straight record close. The Dow posted a modest 0.16% gain but managed a record high at 45,636.90. The Russell 2000 also added 0.16%, keeping pace with the broader market in a sign of broad risk appetite. Optimism around the economy was the key driver, as a stronger-than-expected GDP report and lower jobless claims reaffirmed the health of the U.S. consumer and labor markets. Defensive sectors slightly underperformed, while tech and discretionary stocks continued to lead.
Notable Stock Movements
Thursday brought a mostly green day for the Magnificent Seven, with all names finishing higher except for Tesla and Nvidia. Tesla slipped 1.04%, reversing recent gains, while Nvidia fell 0.82% despite posting an earnings beat, as weaker data center revenue and lingering uncertainty in China weighed on sentiment. The rest of the group, Apple, Microsoft, Amazon, Alphabet, Meta, and Netflix, all posted gains, with the group helping propel the Nasdaq higher. The mixed tone in mega caps continues to reflect investor selectivity even amid a bullish backdrop.
Commodity and Cryptocurrency Updates
Crude oil edged higher by 0.30% to settle at $64.34, continuing its recent rebound but still within a downtrend. Our model maintains that crude remains on track to drift toward $60 later this year as supply pressures and softening global demand take hold. Gold extended its rally with a 0.83% gain, finishing at $3,477 as investors turned to safe havens amid political headlines and market uncertainty. Bitcoin dipped 0.45% to close just above $111,900, cooling off after recent gains while Ethereum saw a larger pullback following a red-hot rally.
Treasury Yield Information
The 10-year Treasury yield fell 0.80% to 4.205%, extending its decline from last week’s highs. Lower yields continue to support equity valuations and provide a tailwind for tech stocks in particular. Yields remain elevated but under control, and as long as they stay below the critical 4.5% threshold, equities are unlikely to face serious pressure. Should rates spike above 4.8% or 5%, however, markets could quickly reverse as valuation concerns resurface.
Previous Day’s Forecast Analysis
Wednesday’s forecast projected a SPY range between $640 and $654.25, expecting heightened volatility driven by Nvidia earnings and macro data releases. The model leaned bullish and emphasized upside targets at $649, $650, and $653, while cautioning that a failure to hold $642 could invite a drop to $640 or even $635. The trading strategy continued to favor long setups above $642 and advised using tight stops near resistance. The forecast highlighted that any move above $647 could spark a push toward $650, while breaks below support could invite sharper selloffs. The VIX was noted at 14.84, indicating low volatility and favoring disciplined long trades.
Market Performance vs. Forecast
SPY’s actual performance aligned very closely with Wednesday’s forecast. It opened at $647.21, slightly above the forecast’s $647 breakout level, and surged to an intraday high of $649.48, matching the upper resistance zone projected. The session low of $645.34 remained well above the $642 support line, and the strong close at $648.93 confirmed the model’s bullish lean. Long trades above $642 and especially those triggered around $645 proved highly effective. The market’s reaction to Nvidia and the GDP release helped fulfill the bullish continuation scenario, and traders who followed the levels had ample opportunities to capture profits. Once again, the model delivered actionable setups in line with the intraday structure and market behavior.
Premarket Analysis Summary
In Thursday’s premarket analysis posted at 7:43 AM, SPY was trading at $646.47 with a bias level identified at $645.65. The model leaned modestly bullish following Nvidia’s earnings and anticipated support holding at $645.15, with upside targets at $647.15 and $648.65, and a stretch target of $650. It cautioned that below the bias, short entries could be valid, especially toward $643.65 and $640, while above the bias, traders should look for rallies toward key resistance. The forecast advised profit-taking on strength due to signs of lingering weakness beneath the surface.
Validation of the Analysis
Thursday’s price action confirmed the accuracy of the premarket analysis. SPY opened just above the key bias level at $647.21 and dipped to a session low of $645.34, narrowly testing the first support target at $645.15 before bouncing strongly. SPY then rallied toward the upside targets, breaking through $647.15 and reaching as high as $649.48, slightly above the upper target of $648.65. Traders who followed the roadmap had multiple opportunities to trade both the dip and the breakout, with the key levels acting as magnets throughout the day. Once again, the premarket analysis proved to be highly predictive and actionable.
Looking Ahead
Friday brings the PCE inflation data, one of the Fed’s most closely watched indicators and the final key macro event before the long weekend. With markets closed Monday, trading volume may be light, but the potential for a sharp reaction to PCE is high. Tuesday’s PMI and Wednesday’s JOLTS jobs data will follow, adding further directional catalysts. While the broader trend remains bullish, these events could bring brief volatility spikes and shift short-term sentiment.
Market Sentiment and Key Levels
SPY closed at $648.93, continuing to hold within a bullish trend structure with buyers stepping in at every dip. Sentiment remains firmly bullish above $645, with short-term resistance building at $650, $655, and $660. Support now rests at $647, $646, $644, and $640. A confirmed breakout above $650 could trigger a fast move toward $655 and even $660, but a break below $645 could bring a retest of $640. So long as SPY holds above $642, bulls retain the upper hand, but bearish momentum could return on a sustained move below $640.
Expected Price Action
Our AI model projects SPY to trade between $645.50 and $652 on Friday, signaling a narrowing range that suggests choppy, two-way trading. The model maintains a bullish bias, favoring long setups above $645 with upside targets at $650, $653, and $655. However, if SPY fails to hold above $645, traders should watch for a decline toward $644 and $640. A breakout above $650 would confirm bullish strength and open the door for higher targets, but a stall or reversal at that level would increase the risk of profit-taking. This forecast is actionable intelligence; expect a potentially volatile session due to PCE, and be ready to pivot as the market reacts.
Trading Strategy
Long trades remain preferred above $645, with targets at $650, $653, and $655. Breakouts above $650 could generate momentum, but resistance is expected near $655 and $660. Short trades should only be considered if SPY breaks below $644 with conviction, aiming for $640 and potentially $635. With volatility still subdued, risk remains skewed toward the upside, though traders should remain alert for sharp reversals. The VIX fell 2.83% to 14.43, underscoring the current calm. Use tight stops near resistance, especially ahead of Friday’s PCE, and consider trimming position sizes into elevated uncertainty. Trade confirmed setups, and don’t fade strength without reason.
Model’s Projected Range
SPY’s projected range for Friday sits between $645 and $653.50, with the Call side dominating in a narrowing band that suggests choppy price action with intermittent trending periods. Friday’s PCE release has the potential to spark significant volatility, but with the long holiday weekend ahead, our model still sees a choppy session with most market participants already on vacation. Overnight, SPY moved sharply higher, opening at $647.24 above yesterday’s record close, but that move quickly faded as the market sold off, retesting the $645 level before bouncing and reversing to secure yet another intraday record high and record close. Better-than-expected GDP and favorable unemployment claims indicate the economy remains in solid shape heading into fall. Bulls are firmly in control, and strong volume today further supports the trend. With PCE tomorrow, expectations are essentially a coin toss, though absent external catalysts we continue to favor higher prices, consistent with our call yesterday that new highs were likely. SPY still needs to reach $660 to confirm the recent breakout, a level our model suggests may soon be tested to gauge bullish strength; a failure there would tilt probabilities toward a September retracement. With the range narrowing, two-way trading is favored on Friday. Overnight, bulls will look to defend $645, with a break opening the door to $640; bears need a close below $640 to gain traction, and below $635 there is little to support the market. Resistance is expected at $650, $655, $656, and $660, while support sits at $647, $646, $644, and $640. Since reclaiming $585, SPY has remained in a steady uptrend with dip buyers consistently stepping in. Most mega caps continued higher today, keeping momentum intact. Still, the parabolic advance carries rising risk with limited reward, and our model is beginning to show early signs of weakness after the first week of September. While it is not yet time to fade the trend, quick profit-taking and caution with overnight holds are advised, with long setups favored until major support breaks. The VIX fell 2.83% to 14.43, reinforcing the bullish case as volatility below 23 remains a tailwind for equities, though a breakout above that level could finally spark the long-anticipated 5–10% pullback. SPY’s close above the bull trend channel from the April lows reaffirms the bullish structure.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended the day in a narrow, Bullish Trending Market State, with SPY closing well above MSI resistance turned support. Extended targets printed for most of the day and into the close which saw SPY break another intraday high and closing record. Overnight and into the premarket, SPY gapped up and rescaled to its current bullish state. A dip after the open saw the MSI rescale to a ranging state but this didn’t last long as extended targets in the premarket warned that any pullback was likely to be bought. And sure enough after a couple of hours of chop, the MSI rescaled back to the current bullish state and started printing extended targets which pushed SPY to new highs. In its current state, the MSI is forecasting slightly higher prices on Friday, with any retrace to as low as $645, likely to attract buyers. MSI support is now at $647.35 and lower at $646.72.
Key Levels and Market Movements:
On Wednesday we wrote, “Thursday SPY will be affected by Nvidia earnings, GDP and unemployment claims, and as such trade what you see,” and noted, “we favor long over short trades but remain open to shorts on failed breakout trades above today’s highs.” We also stated, “Overnight the bulls want to defend $642 as a worst-case level in an effort to push SPY to a new all-time high, potentially to as high as $650.” With that context, and with the MSI opening in a narrow Bullish Trending Market State with extended targets above, we looked for either a dip-buy opportunity or a fade of a failed breakout above the prior day’s high. That failed breakout came just two minutes after the open, but with extended targets printing, we did not immediately short since we never fade extended targets. Fortunately, ten minutes later extended targets stopped printing, so we went short just above MSI resistance at $647.50 and set T1 at $646.50, just below MSI support. We always take a minimum of $1 as a first target on SPY, and that level hit quickly, allowing us to set T2 at $645.65 from the premarket report. That target was reached before 10 a.m., at which point we moved our stop to breakeven and trailed. The MSI then rescaled into a ranging state which we generally dislike trading in. But SPY presented a textbook failed breakdown just after 10 a.m., prompting us to exit and reverse long at $645.50 with the plan to flip the first trade. The reversal worked as expected: we hit our first target at MSI resistance at $646.75 and set T2 at $647.40, both reached by 11:20, after which we simply moved our stop to breakeven and trailed. Extended targets began printing again just after noon, so we held, anticipating a possible move to the premarket $650. SPY continued higher through the afternoon, and with a less-than-perfect failed breakout 15 minutes before the close, we elected to lock in our final target at $649.25. That decision capped two strong, disciplined trades fully aligned with MSI signals, our broader market model, and key technical levels. Two for two once again, and a solid day for the bank account thanks to a clear plan, disciplined execution, and a strong alignment between MSI signals, our broader market model, and key technical levels. The MSI continues to be a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Friday brings the Fed’s most-watched indicator, PCE, which under normal circumstances would be expected to move the market materially, though with the long weekend ahead, volatility may be more muted. Absent an external catalyst, the session is likely to deliver more sideways, two-way price action with some follow-through from today’s rally. The bulls want to defend $645 in an effort to push SPY back toward new all-time highs, potentially as high as $655, while a close below $645 would open the door for bears to attempt a move to $640, where they would likely press their luck. For real traction, however, the bears need a break of $635 to generate momentum. The broader structure continues to favor the bulls until major support levels are lost, so we maintain a preference for long setups above $640, while remaining open to shorts on a confirmed break below that level or on a failed breakout above $649. Overnight the market may move lower to retest major support at $645 where we once again believe the dip will be bought. 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 $649 to $660 and higher strike Calls while also selling $646 to $648 Puts indicating the Dealers belief that prices may move higher on Friday but at a minimum, hold above $646. Dealers only sell near the money Puts when they believe prices will move higher. The ceiling for Friday appears to be $655 although $650 may also prove challenging to overcome. To the downside, Dealers are buying $645 to $600 and lower strike Puts in a 3:1 ratio to the Calls/Puts they’re selling/buying displaying little concern that prices could move lower tomorrow. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.
Looking Ahead to Next Friday:
Dealers are selling SPY $649 to $670 and higher strike Calls indicating the Dealers belief that prices may slow their ascent at the current level heading into next week. The ceiling for the week is likely $655. To the downside, Dealers are buying $648 to $540 and lower strike Puts in a 5:1 ratio to the Calls they’re selling/buying, reflecting an increasingly bearish outlook for the week. For the week Dealer positioning has changed from bearish to more strongly 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
SPY continues to push higher, with Thursday’s record close of $648.93 reinforcing the bullish structure. Traders should maintain a long bias above $645, targeting upside levels at $650, $653, and $655. Short setups may become viable if SPY fails to hold $644 or breaks below $640, with downside targets at $635 and $630. Volatility remains low, with the VIX at 14.43, but Friday’s PCE data could jolt the market, so managing risk is essential. Use tight stops near resistance, especially around $650, and remain nimble in case of a sudden shift in momentum. Review the premarket analysis posted before 9 AM ET to account for any changes in our model’s outlook and in Dealer Positioning.
Good luck and good trading!
