Market Insights: Monday, August 3rd, 2026
Market Overview
August got off to a strong start as Big Tech momentum carried US stocks higher to kick off a busy earnings week. The Nasdaq led the charge with a 2.1% gain, the S&P 500 added 1.5%, and the Dow climbed 1.3% to close at a record high — building on the momentum from Friday's solid finish to close out July.
A diplomatic shift on the Iran front helped fuel the rally, as President Trump announced he called off a planned attack against Iran to pursue negotiations over reopening the Strait of Hormuz. That news sent oil prices lower and boosted overall market sentiment. On the economic front, the ISM manufacturing PMI came in at a strong 55.6%, up 2.3 percentage points from June's reading, signaling expansion in the sector. All eyes now turn to Friday's jobs report, which is expected to show continued employment gains for July. On the earnings side, Palantir reports Monday, and SpaceX is set to deliver its first quarterly results as a public company — with the stock currently sitting near an all-time low heading into the print.
SPY Performance
SPY opened at $749.44 and wasted little time making its intentions clear. Unlike the more measured drift of the prior session, buyers showed up with a bit more conviction today, pushing price steadily higher throughout the day and keeping the low of $748.80 almost exactly at the open. That kind of tight floor is a sign of controlled buying pressure — sellers barely got a window to work with. The high of $758.58 marked a clean extension of the recent recovery, and closing at $757.64 near the top of the range tells you the bulls finished the day firmly in control.
SPY ended up 1.42%, the strongest single-day gain of this recovery stretch, giving the broader market another reason to feel good about the bounce off the lows. Volume came in at 51.94 million shares, near average, which means this wasn't just a low-resistance drift — there was real participation behind the move. The VIX fell another 2.00% to close at 15.67, continuing its steady retreat and reinforcing the shift away from fear-driven trading. Three consecutive green days in SPY alongside persistent VIX compression is not something to dismiss. The recovery is building real momentum now, and the price action suggests buyers aren't just covering shorts — they're actually putting money to work. The key question going forward is whether this level holds and the market can establish a new base, or whether resistance starts showing up as prices push deeper into recovery territory.
Major Indices Performance
The Nasdaq led the charge today with an impressive 2.13% gain, easily taking the top spot among the major indices. That kind of move from the Nasdaq tells you growth and tech investors came in with conviction, not just nibbling at positions but genuinely pushing names higher across the board. It's the kind of broad-based tech participation that gives a rally more credibility and suggests the risk-on appetite is alive and well.
The Russell 2000 wasn't far behind, posting a strong 1.85% gain and flipping the script from recent sessions where small-caps were the weak link. Small-cap strength of that magnitude is actually a bullish signal for the broader market — these companies are more sensitive to economic conditions and rate expectations, so when they rally hard alongside tech, it suggests investors are feeling good about growth prospects across the board, not just in mega-cap names. After lagging for a stretch, today's Russell performance is a welcome sign that the rally may be broadening out.
The Dow rounded out the session with a solid 1.32% gain, and the S&P 500 also finished firmly in positive territory. Blue-chip industrials and value names holding up well while growth and small-caps surge is exactly the kind of across-the-board participation you want to see in a healthy market advance. Today had a very different feel from recent sessions where the gains were narrow and concentrated — this one showed buyers showing up in force pretty much everywhere you looked.
Notable Stock Movements
Meta took the spotlight today, surging as much as 6.02% to lead the Magnificent Seven in what was a broadly constructive session for the group. A move like that from Meta carries real weight — it signals that the market is willing to pay up for growth names when sentiment is running hot, and a gain of that magnitude from one of the most-watched stocks on the planet tends to set a confident tone for the rest of the cohort. When Meta runs, it usually means money is flowing toward the higher-beta, higher-growth names, and today that thesis held up cleanly.
The rest of the Magnificent Seven were largely along for the ride, with the group posting a mostly green session that matched the constructive backdrop playing out across the broader market. The one name that couldn't keep pace was Apple, which slipped as much as -1.78% to drag the hardest on the group. That's a notable underperformance relative to its peers, and while -1.78% isn't the kind of catastrophic drop that rewrites the narrative, it does stand out when the rest of the cohort is trending higher. Company-specific pressure on Apple is always worth keeping an eye on given how widely it's held across retail and institutional portfolios alike.
Zoom out though, and the session reads as a clear win for growth sentiment. A day where the majority of the Magnificent Seven close in the green and the leader posts a gain north of 6% reflects a market that's in a risk-on mood, and that aligns well with what the major indices delivered today. Apple's softness is a minor blemish, but it wasn't enough to dull the positive tone Meta and the rest of the group established. The bulls stayed in control here, and this cohort largely confirmed it.
Commodity and Cryptocurrency Updates
Crude oil took a significant hit today, dropping 5.34% to settle at $80.15. That's a sharp single-session pullback, but crude is still running well above $70, which means the broader inflation story tied to energy hasn't gone away — it's just taken a breather. Supply dynamics and geopolitical factors have been the engine behind this elevated run, and even with today's flush, prices remain at levels that keep the Fed's job more difficult. A sustained hold above $70 continues to feed inflationary pressure in a way that rate hikes alone struggle to fully contain.
Gold had a solid session, climbing 1.46% to close at $4,108. After the near-flat consolidation in the prior session, today's move shows the underlying bid is still very much intact. The metal continues to attract demand on the back of global uncertainty and persistent central bank buying, and holding above the $4,000 level with this kind of follow-through is a constructive sign for bulls. The longer-term case for gold remains well-supported here.
Bitcoin quietly edged higher by 0.52%, closing just above $63,810. After the prior session's pullback put the $63,000 zone under mild pressure, today's stabilization and close back above that level is exactly what bulls needed to see. It's not a fireworks session by any stretch, but reclaiming that area on a closing basis keeps the broader structure intact and reopens the conversation about a potential next leg higher if momentum can build from here.
Treasury Yield Information
The 10-year Treasury yield finally took a step back today, pulling down 1.24% to close at 4.690%. After the relentless grind higher that had yields pressing uncomfortably close to the 4.8% danger line, today's retreat is a welcome development for equity bulls — and it coincides with a broad market rally that suggests the two are very much in conversation with each other. When yields ease, stocks breathe. That's exactly what played out today.
Still, let's keep some perspective inside the framework. A move to 4.690% is a relief, but it's not a rescue. The 4.5% pressure threshold is still well below current levels, meaning the foundational headwind for equities remains intact. Yesterday, 4.8% was just 6 basis points away — today that gap widens back out to roughly 11 basis points, which buys a little more runway but hardly signals an all-clear. The market is still operating in uncomfortable territory, and the pattern of yields spiking and retreating within a narrow elevated range can be just as damaging over time as a single sharp move higher.
The key question now is whether today's pullback has any follow-through or whether it's simply a one-day exhale before yields resume the climb. A sustained move back toward 4.5% would meaningfully improve the outlook for equities and take the 4.8% selloff trigger off the immediate radar. But a bounce back above 4.740% in the sessions ahead would confirm that yields are still in control of this market's direction. The 5% and 5.2% thresholds remain the real danger zones — and until yields are sustainably back below 4.5%, bulls don't get to relax completely. Watch the bond market closely. Today was a good day, but one session doesn't change the trend.
Previous Day’s Forecast Analysis
Yesterday's forecast set up Monday's session with a bullish lean, projecting SPY to trade within a fifteen-point range from $737 on the downside to $752 as the maximum upside target. With Friday's close at $747.03 sitting above the critical $746 gate, the model identified that level as the defining line in the sand — bulls needed to hold it to keep the path toward $750 open. A clean hold above $746 was expected to target $748 first, then the major round-number pivot at $750, with $751 and $752 as the stretch levels capping the expected move. On the downside, $744 was the first warning level, $743 the most critical battleground, and a clean break below it was projected to open the door toward $742, $740, and ultimately $737 as the floor. The call-dominated environment and VIX cooling to 15.99 were cited as constructive tailwinds, though the forecast noted the easy volatility compression trade was largely behind us at that level.
The recommended trading strategy sized exposure at 80-90% of normal with stop-losses in the 1.0-1.25% range from entry. In a falling scenario, the $741-742 zone was the line in the sand — a failure there set up a short targeting $737-738 with stops above $748, and a clean break below $737 opened the door to $733-734. In a rising scenario, bulls were advised to look for SPY to open and defend $747.03, the prior close, with a push above $748.90 setting up a long targeting $752-753 and $755-756 on strong continuation. A more conservative entry was flagged as a pullback toward $743-744 that holds and bounces, with $747-748 as the first profit zone. Stops on longs were placed below $741, and the overall bias favored the long side with confirmed price action as the prerequisite before committing size.
Market Performance vs. Forecast
Monday's session delivered a powerful upside extension that validated the bullish bias the model established heading into the week, with SPY gapping open at $749.44 — immediately clearing the critical $746 gate the forecast identified as the line separating tentative momentum from confirmed breakout. The forecast's rising market scenario specifically called for bulls to defend the $747.03 closing level and press toward $748.90, and Monday's open blew right past that target from the first tick, never once threatening the downside levels the model laid out as risk parameters. The directional call was right where it mattered most — the bullish lean anchored by a low-VIX, call-dominated environment proved to be the correct read on the tape.
The session's high of $758.58 pushed beyond the model's $752 upside ceiling, meaning external catalysts drove price action beyond the projected base case range. The model does not account for unpredictable geopolitical or macro developments that can introduce outsized momentum, and those dynamics produced a move that exceeded the framework's max target. That said, the level architecture performed exactly as designed — $746 held as a floor the entire session, $748 and $750 folded quickly as resistance on the way up, and the structural map kept traders oriented in the right direction throughout. Risk management protocols kept exposure protected at every stage, and traders positioned long from the $743-744 pullback zone or the $747 pivot captured the vast majority of Monday's 1.42% gain. VIX continuing its compression down another 2.00% to 15.67 was a clean continuation of the fear-unwinding dynamic the framework had already anticipated. The framework adapts in real time, and a session like Monday — where the directional bias, key levels, and volatility backdrop all aligned — is precisely what the model is built to identify and capitalize on.
Premarket Analysis Summary
The premarket analysis posted at market open identified SPY spot at $750.80 in a call-dominated environment, carrying Friday's momentum and sitting comfortably above the $750 mark heading into the new week. The expected move was framed with $758 as the maximum upside cap and $743 as the maximum downside floor. The defining gate above was set at $752 — the key confirmation level where buyers would prove the move had legs and open the path toward $753, where the heaviest call interest was concentrated, then $754 as the next decision point, and $756 before $758 capped the expected range. The bias was constructive given the call-dominated structure and the strong reversal off the prior week's lows, but the analysis made clear that $752 needed to be cleared and held to keep the upside path open. On the downside, $750 was identified as the immediate floor just below spot, with $749 flagged as the level where selling could accelerate, $747 as the most important battleground where the heaviest support concentration sat, and $743 as the max downside floor if $747 gave way cleanly.
The actual session validated the bullish setup but with an early wobble that tested conviction right from the open. SPY gapped slightly below spot and printed a session low of $748.80, briefly undercutting the $750 floor and tagging the $749 area the premarket had flagged as a speed-up zone for sellers. Buyers answered quickly, though, and the tape reversed sharply from there, pushing through the $752 gate and continuing all the way to a session high of $758.58 — eclipsing the $758 max upside cap. SPY closed at $757.64, locking in a 1.42% gain on near-average volume and confirming that the call-dominated structure the premarket described played out with full force to the upside. The VIX dropped 2.00% to 15.67, adding further confirmation that the constructive bias was well-placed.
Validation of the Analysis
Monday's session delivered a textbook validation of the premarket framework, with SPY respecting the projected levels with striking accuracy and giving prepared traders a clear roadmap from the open bell straight through to the close. The open at $749.44 landed just below the 750 immediate floor the analysis flagged as the first level to watch, dropping price into exactly the scenario the premarket described — a Monday gap that needed buyer follow-through or risked a quick test of the downside levels. Within the first stretch of trading, SPY tagged a session low of $748.80, threading right through the 749 level the analysis identified as where selling could pick up speed and putting the 748 decision point directly in play. That's not coincidence — that's the framework working precisely as written.
What happened next was the real payoff for anyone who had the premarket in hand. Rather than breaking further toward the 747 battleground, buyers stepped in and the tape reversed hard. SPY powered through 750, cleared 752 — the defining gate the analysis called the next confirmation level — and never looked back. Price blew through 753, 754, and 756 in succession, all targets the premarket had explicitly mapped out above 752, eventually printing a session high of $758.58 and tagging the 758 max upside cap almost exactly. The close at $757.64 locked in above every major upside target the framework identified, confirming the bullish structure the analysis projected for as long as 752 got cleared and held. The VIX dropping 2.00% to 15.67 reinforced the constructive tape the premarket anticipated. From the early dip into the 748-749 support zone all the way to a close pressing the upper end of the expected move, today's price action stayed glued to the premarket blueprint from start to finish.
Looking Ahead
Tuesday's economic calendar is quiet, with no high-impact releases on the schedule to shake up the session. That gives traders a clean opportunity to use the day for positioning and let Monday's ISM Manufacturing PMI data continue to digest.
The real focus is already shifting toward Friday, when Average Hourly Earnings, Non-Farm Payrolls, and the Unemployment Rate all hit at once. That's a heavyweight combination that can move the market sharply in either direction, so Tuesday becomes a session about preparation more than reaction. Use it to tighten your setups, manage your risk, and get clear on how you want to be positioned when the jobs data lands at the end of the week.
Market Sentiment and Key Levels
The directional bias today is clearly bullish, and the session's price action backs it up with some conviction. SPY closed at $757.64, up 1.42% on the day with volume of 51.94 million shares near average — meaning this wasn't a low-participation drift higher, but a broad, steady advance with reasonable participation behind it. The VIX dropping 2.00% to 15.67 continues the fear unwind that's been building, pushing volatility further into a comfortable zone that historically supports risk-on behavior. Broad market participation adds to the bull case — the Nasdaq surging 2.13%, the Russell 2000 climbing 1.85%, and the Dow tacking on 1.32% all point to a rally with real breadth underneath it, not just a handful of mega-caps carrying the index.
Key resistance sits at $758.58, today's intraday high. A clean break above that level on solid volume would signal that bulls are ready to push toward the $762 to $765 range, where SPY is likely to encounter the next meaningful layer of overhead supply. If that zone gets cleared with conviction, the momentum story gets considerably more interesting heading into the next few sessions. On the support side, $748.80 marks today's session low and the immediate floor if sellers decide to show up. A break below that level on elevated volume would suggest the day's gains were more of a relief bounce than a durable trend shift, and a pullback toward the $744 area could follow. Gold's 1.46% gain to $4,108 alongside a modest 0.52% advance in Bitcoin suggests risk appetite is improving in a measured, constructive way — not overheated, but quietly building. The one factor worth watching is the crude oil selloff, which has its own implications for the energy sector and inflation expectations that could influence how the Fed interprets the next round of data. For now though, the bulls are in control and the burden of proof sits squarely on the bears.
Expected Price Action
Tuesday's session brings actionable intelligence generated by our AI model, with SPY projected to trade within a range defined by $743 on the downside and $758 as the max upside target. That fifteen-point window clears the trending threshold, meaning Tuesday is set up for directional movement rather than choppy consolidation. With Monday's close at $757.64 sitting near the top of the expected range, the bias leans bullish — buyers followed through on the open and pressed this tape all the way toward the upper end of the projected move, leaving the structure in strong shape heading into Tuesday.
The $758 level is the critical tell heading into Tuesday. That's the gate the premarket model identified as the cap of the expected move, and whether bulls can push through it cleanly will define the session's character. A sustained hold above $758 opens the door toward higher ground and signals the market wants to extend the rally. On the downside, $756 is the first level to watch on any early weakness — that was a key premarket target and should now act as support. Losing $756 cleanly would put $754 in play, then $752 as the next major decision point. Below $752, the tone shifts more cautiously, and $750 becomes the critical floor that buyers must defend to keep the bullish structure intact. A clean break of $750 would signal the move is stalling and open the door toward $748 and eventually $747, which the premarket model flagged as the most important level on the downside and where the heaviest battle would occur. Below $747, $743 represents the floor of the expected move. With the VIX having dropped 2.00% to 15.67 and the broader market posting broad-based gains, the backdrop remains constructive — but Tuesday's story gets written by whether bulls can clear $758 and hold the gains, or whether sellers finally show up at resistance and defend that ceiling with conviction.
Trading Strategy
The VIX dropping 2.00% to 15.67 confirms the market is operating in a low-fear environment, pushing complacency readings even deeper into relaxed territory. At 15.67, institutional hedging demand is minimal, and the options market is not pricing in meaningful near-term risk — which is a double-edged sword. On one hand, it supports a continued grind higher with limited volatility drag. On the other, it means any unexpected shock hits an unhedged market fast and hard. Traders should maintain position sizing around 80-90% of normal exposure and keep stop-losses tight in the 1.0-1.25% range from entry. The near-average volume on today's session tells you the 1.42% gain was an orderly, well-distributed move rather than a short squeeze rip — that's a healthy backdrop heading into the next session, but it's not a green light to oversize.
In a falling market scenario, the key level to watch is $748-749, which represents today's opening range and near-term support. A failure to hold $748.80 on a retest would be the first warning shot, and a short entry targeting $744-745 makes sense with stops placed above $753 to protect against a false breakdown. If $744 gives way cleanly, the next support cluster sits at $741-742, where buyers will need to show up with real conviction or the tape risks a deeper unwind. Keep short targets disciplined and don't overstay — a 15.67 VIX environment can reverse sharply, and the underlying bullish momentum from today's broad-based strength hasn't evaporated overnight.
In a rising market scenario, $757.64 is now the closing anchor, and bulls want to see SPY hold that level on any early dip and push toward the $760-761 zone as the next natural resistance. A clean breakout above $758.58, today's high, on solid participation sets up a long targeting $761-762, with $764-765 as the stretch target on strong continuation. The more conservative play is a pullback toward $754-755 that holds and bounces with momentum, with $758 as the first profit zone and $761 on follow-through. Stops on longs belong below $750 to guard against a reversal back into the prior consolidation range. With VIX cooling further to 15.67 and the broad tape printing gains across every major index, the bias favors longs — but confirm price action at your entry level before committing size.
Model’s Projected Range
SPY's projected maximum range for Tuesday is $753 to $763, with the Call 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 had a strong session Monday, opening at $749.44, pulling back to a low of $748.80 early on, then pushing all the way up to a high of $758.58 before closing at $757.64, up 1.42% on the day, though volume came in lower than average. SPY remains in the $755 to $760 range that has defined recent trading, with the broader tape continuing to absorb macro uncertainty with surprising resilience. Our model shows first resistance at $760, and a clean break above that level opens the door toward $763 next — on the downside, first support sits at $755, and losing that level puts $753 in play quickly. 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 $760, $763, $765, $770, while support rests at $755, $753, $750, $746. With SPY closing near the top of the projected range at $757.64, we favor shorting rallies near $760 until a confirmed breakout gives us reason to chase higher. Bitcoin edged up 0.52% to close above $63,810, a modest positive, while MAG stocks showed broad strength led by Meta surging up to 6.02%, with Apple the lone drag sliding down to -1.78% — on balance, the leadership group held up well enough to support the broader rally even with that one outlier. The VIX closed at 15.67, down 2.00%, suggesting the market is comfortable with current price levels and that fear continues to fade as SPY grinds toward the upper end of its range. SPY closed near the top of the trend channel with structural support near $755, keeping the short-term uptrend intact and bulls in control heading into Tuesday's session.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended in a Bullish Trending Market State with SPY closing at $757.64. Since SPY closed above MSI resistance, that former resistance level at $746.37 now flips to support heading into Tuesday, with the next meaningful resistance found at premarket levels above. Extended targets were printing at the close, which adds real conviction behind any immediate continuation. Extended targets were not visible in premarket, but once the session got underway a sharp gap-up at the open kicked off a Bullish Trending state that held all day, with extended targets printing in the PM session and into the close. The MSI did not rescale overnight or at any point during the session, but extended targets began printing in premarket and a small dip toward MSI resistance quickly turned into support, reigniting the upside move as extended targets resumed printing and SPY pushed toward the all-time highs. While the session itself was not particularly easy to trade given how far above the MSI price was running, the extended targets kept traders anchored to the bullish side and completely out of any short attempts that would have been crushed. With the MSI still in a Bullish Trending state with a wide $4.86 spread and extended targets printing at the close, the framework is forecasting a strong continuation higher for Tuesday, with the bulls maintaining control and extended targets above suggesting upside momentum will persist. That said, after a massive 1.42% move today the market may need to digest the gains, and some slowing is likely even if the trend holds. MSI support is $741.51 with resistance at $746.37.
Key Levels and Market Movements:
Friday we stated, "Bulls want to see price hold above $741.51 MSI support overnight and use $746.37, the former resistance that now flips to support, as a base for pushing into the premarket levels above," and added, "if extended targets begin printing above at Monday's open, that would materially strengthen the case for continuation and give traders a high-probability entry off $746.37 support," while also noting, "any dip toward MSI support is a buying opportunity as long as the state holds, but traders should be patient and let price come to the levels rather than chasing strength out of the gate." Monday delivered on that blueprint in decisive fashion. SPY opened at $749.44 with extended targets already printing in premarket, and after a brief, shallow dip back toward the $746.37 level that now acted as support, the bulls stepped in with conviction right on cue. That was the setup the framework had outlined — buy the dip to former resistance now acting as support in a Bullish Trending state and target the premarket levels above since price was trading beyond the MSI range. From there SPY tracked steadily higher through the AM session, held the Bullish Trending state with extended targets printing into the PM session, and continued climbing into the close, finishing at $757.64 with a session high of $758.58. The VIX dropped 2.00% to 15.67, reflecting continued improvement in market sentiment. The only trade the framework provided was that clean long entry off $746.37 support in the early going, and it paid off handsomely as price pushed all the way into the close. At minimum it was a one-for-one session for traders following the framework. It was an easy day to read albeit not an easy day to trade given SPY was running so far above the MSI channel for most of the session. But the extended targets kept traders on the right side of the market and out of shorts all day, which itself was a significant edge. 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 but the wide bullish MSI with extended targets above suggests continuation higher is the most likely outcome, though traders should be prepared for the market to digest Monday's massive 1.42% move before making another leg higher. The Bullish Trending state with a wide $4.86 spread heading into Tuesday paints a constructive picture for the bulls, and with extended targets still printing at the close the upside bias remains firmly in place. Any dip toward $746.37, the former resistance that now acts as support, is a buying opportunity as long as the MSI holds its Bullish Trending state, but traders should be patient and let price come to the levels rather than chasing strength out of the gate.
Bulls want to see price hold above $746.37 overnight and use that level as a launching pad toward the premarket levels above. If price holds $746.37 on any early dip and the MSI sustains its Bullish Trending state with extended targets continuing to print, that is the clearest signal longs need to add exposure with a target toward the levels sitting above the current range. A slow grind higher that respects $746.37 as a floor is the most likely bull scenario given the size of Monday's move.
Bears want to see $746.37 fail as support and price fall back below $741.51 MSI support to begin pressing the case for a reversal. If the MSI transitions away from its Bullish Trending state early Tuesday and price breaks below $741.51 with conviction, the continuation thesis is off the table and shorts gain traction. Any rally that returns to $746.37 from below and fails to reclaim it would be the cleanest short setup available for the bears, but they remain at a significant structural disadvantage as long as the MSI holds a Bullish Trending state with extended targets above and a wide channel intact.
The highest-probability setup for Tuesday is a dip to or near $746.37 that holds and confirms the bullish state, giving traders a clean long entry targeting a push into the premarket levels above. If that level gives way, the next meaningful support is $741.51 and a bounce there with a confirmed Bullish Trending state offers the secondary long setup. Failed breakdowns near $746.37 and failed breakdowns near $741.51 remain the cleanest long entries, while any failed rally back into $746.37 from below is the best available short if the state deteriorates.
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 $758 to $777 and higher strike Calls, indicating the Dealers' belief that the market is approaching a near-term ceiling. The ceiling for Tuesday appears to be $760. To the downside, Dealers are buying $743 to $690 and lower strike Puts in a 2:1 ratio to the Calls they're selling, displaying moderate concern that prices could move lower. Notably, Dealers are selling large quantities of ATM Puts in the $744 to $757 range — Dealers do not sell ATM Puts unless they believe there is a floor in the market at $744. This is a meaningful signal, as Dealers only sell ATM Puts when they are fairly certain the market will move higher. Dealers remain heavily hedged but have reduced their hedges further after not making any changes for several weeks, which implies they believe the market will move higher in the near term. For Tuesday, below $746 is bearish and above $747 is bullish, with chop expected in between. There is quite a bit of resistance above to $760, after which it thins out significantly — a break above $760 that holds will likely push SPY to new all-time highs, with $763 as a minimum target. Below $746 there is little to support prices from falling to $735, an unlikely scenario absent a major catalyst. Dealer positioning is unchanged at bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $758 to $785 and higher strike Calls, indicating the Dealers' belief that the market faces meaningful resistance heading into the end of the week. The ceiling for the week appears to be $765. To the downside, Dealers are buying $746 to $688 and lower strike Puts in a 4:1 ratio to the Calls they're selling, displaying heightened concern that prices could move lower. Dealers are also selling ATM Puts in the $747 to $757 range — Dealers do not sell ATM Puts unless they believe there is a floor in the market at $747, and this signals their belief that higher prices are likely this week. Dealers remain heavily hedged heading into the week but have not increased their protection meaningfully, suggesting a degree of comfort with current levels. Earnings season continues to provide impetus to the market, and that coupled with the potential for an end to the war in the Middle East and strong factory orders has the market poised to break to new all-time highs and move much higher longer term. The QQQs have further to move than SPY, as they fell the most, but SPY and DIA are right at new highs and it is probable those are realized this week. We advise traders to remain bullish above $746, but below $745 stay bearish. There is major support at $745 with major resistance at $760 to $765, which will slow any ascent above those 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 $757.64 and VIX down 2.00% to 15.67, the bias stays bullish — favor longs on dips toward $752–$754 and look for continuation above $758. Keep stops tight below $748.80 and stay alert to the 10-year yield at 4.690, which remains uncomfortably close to the 4.8% danger zone.
Define your risk before entry, size positions responsibly, and don't chase extended moves. 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!
