Market Insights: Tuesday, August 4th, 2026

Market Overview
Stocks hit record highs again on Tuesday as a powerful earnings wave and ongoing Middle East diplomacy kept the bulls in charge. The Nasdaq surged over 2.6%, the S&P 500 added 1.8% to close at a new record, and the Dow posted a 1.8% gain of its own — tacking on 900 points on top of Monday's record close.

Earnings were the real story driving Tuesday's session. Palantir absolutely stole the show, soaring nearly 30% after CEO Alex Karp called it an "otherworldly" quarter, with US government commercial revenue up 90% year over year. Caterpillar also impressed, topping $20 billion in sales and revenue for the first time ever. Those results sparked a broader rally in chips and tech, with the PHLX Semiconductor Index jumping 6% and names like Intel, Micron, and Nvidia riding the wave. AMD, McDonald's, and Spotify also reported. After the bell, all eyes shifted to SpaceX's first quarterly report as a public company — a high-stakes print for a stock that's been in freefall since its June IPO. On the macro side, Treasury Secretary Scott Bessent said there's "a chance we may have a deal today or tomorrow" to reopen the Strait of Hormuz, keeping oil prices under pressure. The JOLTS report also hit Tuesday as the first key labor market data point ahead of Friday's jobs report.

SPY Performance
SPY opened at $760.63 and barely dipped below that level all session, with the low of $760.52 sitting just a hair under the open — practically the same print. That kind of action tells you demand was present right out of the gate. Buyers didn't hesitate, and sellers never found a real entry point to push back. Price climbed steadily from there, tagging the high of $773.41 before settling at a close of $771.23 near the top of the day's range. That's a clean, disciplined move — the kind that suggests this isn't just momentum chasing.

SPY finished up 1.79%, the strongest single-session gain of this entire recovery stretch, which is saying something given the solid runs we've already seen. Volume came in at 58.65 million shares, near average, meaning real participation backed this move — this wasn't a vacuum rally. The broader market has every reason to take notice. The one wrinkle worth watching is the VIX, which bucked the recent trend and rose 3.47% to close at 16.41. That's a notable divergence — stocks pushing higher while volatility ticks up at the same time is a signal worth respecting. It doesn't invalidate the rally, but it does raise the question of whether some hedging activity is quietly building beneath the surface. Four consecutive green sessions with this kind of price structure is genuinely impressive, but the VIX uptick is a reminder that the market isn't fully convinced the coast is clear just yet.

Major Indices Performance
The Nasdaq took the top spot today with a strong 2.59% gain, once again proving that growth and tech are where the conviction is right now. That kind of move doesn't happen without broad participation across the sector — investors weren't just rotating into one or two names, they were putting real money to work across the growth landscape. When the Nasdaq leads by that margin, it tells you the risk-on trade is firmly in control of the narrative.

The Russell 2000 came in right behind it with a solid 1.96% gain, and that's meaningful. Small-caps don't move like that unless investors are genuinely comfortable with the economic outlook. These are the companies most sensitive to borrowing costs and growth expectations, so seeing them keep pace with the Nasdaq signals that today's rally wasn't just a mega-cap story — it had real breadth behind it. Two consecutive sessions of small-cap strength would suggest the broader market advance is on firmer footing than it's been in a while.

The Dow rounded out the group with a respectable 1.71% gain, and the S&P 500 also finished solidly in positive territory. Blue-chip names holding up while growth and small-caps lead is exactly the recipe for a credible rally. Across the board, today had the feel of genuine buying pressure rather than a defensive repositioning — sellers stayed on the sideline and buyers showed up with purpose pretty much everywhere you looked.

Notable Stock Movements
NVIDIA stepped into the spotlight today, leading the Magnificent Seven with a gain of up to 2.56% in what was a broadly constructive session for the group. A move like that from NVIDIA carries real weight — the stock is as closely watched as any name in the market right now, and when it leads the cohort higher it signals that investors are still willing to chase the AI trade even as macro crosscurrents remain in play. When NVIDIA runs, it tends to give the entire growth complex a confidence boost, and today that dynamic 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 risk-on tone playing out across the broader market. The names that couldn't keep pace were Meta and Amazon, with Amazon dragging the hardest — falling as much as -2.32% to stand as the clear laggard of the cohort. A drop of that size from Amazon is always notable given how widely held the stock is across both retail and institutional portfolios, and it's worth watching to see whether that softness is company-specific or a sign of something broader brewing beneath the surface. Meta also finished in the red, making those two the only exceptions in an otherwise bullish group showing.

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 solid gain reflects a market that's firmly in risk-on mode, and that aligns well with the strength the major indices delivered. Amazon and Meta's weakness is a minor blemish on an otherwise strong showing, but it wasn't enough to dull the positive tone NVIDIA and the rest of the cohort established. The bulls stayed in control here, and this group largely confirmed it.

Commodity and Cryptocurrency Updates
Crude oil got hit hard again today, dropping 5.55% to settle at $75.88. Even with that steep single-session pullback, crude is still holding well above $70, which means energy remains a factor in the broader inflation picture. The move lower offers some short-term relief, but as long as prices stay at these elevated levels, the Fed's job doesn't get any easier. Supply dynamics and geopolitical factors have kept this market propped up, and a sustained hold above $70 continues to feed inflationary pressure in a way that monetary policy alone struggles to fully neutralize.

Gold had another strong session, climbing 2.48% to close at $4,134. That's a meaningful move building on yesterday's solid gains, and it signals that the underlying bid in the metal is anything but fading. Global uncertainty and persistent central bank demand continue to drive buyers into the space, and the way gold is holding and extending above the $4,000 level with consecutive follow-through sessions is a constructive sign for anyone in the bull camp. The longer-term case remains firmly intact.

Bitcoin continued its steady grind higher, climbing 1.03% and closing just above $64,115. After yesterday's stabilization back above the $63,000 zone, today's close adds another layer of confirmation that the structure is holding. It's not a headline-grabbing move, but back-to-back positive sessions with the price pushing further above that key level keeps the door open for a potential next leg higher if momentum continues to build.

Treasury Yield Information
The 10-year Treasury yield continued its retreat today, slipping another 1.26% to close at 4.630%. That's two consecutive sessions of yield pullbacks, and the bond market is starting to hand equities a little more breathing room. The rally across all major indices today aligns perfectly with that dynamic — when yields move lower, risk appetite tends to expand, and that's exactly the story the market told today.

That said, the framework still demands caution. At 4.630%, yields remain well above the 4.5% threshold where pressure on equities begins. We're sitting 13 basis points above that line, which is better than where we were two sessions ago when 4.8% was practically knocking on the door, but it's not a comfortable cushion by any means. The good news is that the gap between current levels and the 4.8% selloff trigger has now widened meaningfully — roughly 17 basis points — which gives the equity rally a bit more room to run without the bond market snatching it back.

Two straight days of declining yields raises a fair question: is this the beginning of a genuine rollover, or just a temporary pause before the climb resumes? A continued grind toward 4.5% would flip the narrative and give equity bulls real conviction. But if yields reverse and start pushing back above 4.700%, that would signal the recent pullback was nothing more than noise inside a still-elevated range. The 5% and 5.2% danger zones aren't on the immediate radar right now, but this market has shown it can move fast. Keep watching the bond market — two good days are encouraging, but the trend hasn't officially turned yet.

Previous Day’s Forecast Analysis
Yesterday's newsletter projected SPY to trade within a range of $743 on the downside and $758 as the max upside target — a fifteen-point window that cleared the trending threshold, signaling the session was set up for directional movement rather than choppy consolidation. With the prior close sitting near the top of that range, the bias leaned bullish heading into Tuesday's session.

On the upside, $758 was identified as the critical gate — the level bulls needed to clear cleanly to signal extension of the rally. A sustained hold above $758 was expected to open the door toward higher ground, with $760-761 as the next natural resistance and a breakout above $758.58 targeting $761-762, with $764-765 as the stretch target. The more conservative long setup called for a pullback toward $754-755 that holds and bounces, with $758 as the first profit zone and stops on longs placed below $750. On the downside, $756 was the first support level to watch, followed by $754 and $752 as the next decision points. Below $752, $750 was flagged as the critical floor for the bullish structure, with a clean break there opening the door toward $748 and $747 — the most important downside level where the heaviest battle was expected. A failure at $748-749, and specifically a break of $748.80, was the signal for a short entry targeting $744-745 with stops above $753, and a clean loss of $744 would put the $741-742 support cluster in focus.

The overall trading strategy maintained a bullish bias with position sizing recommended at 80-90% of normal exposure and stop-losses kept tight in the 1.0-1.25% range from entry. The low-VIX environment at 15.67 supported a continued grind higher but also warned that any unexpected shock would hit an unhedged market quickly — so the guidance was to confirm price action at your entry level before committing size rather than chasing momentum.

Market Performance vs. Forecast
Tuesday's session delivered another powerful upside extension that validated the bullish directional bias embedded in the forecast, with SPY opening at $760.63 and immediately clearing the $758 gate the model identified as the critical tell for the session's character. The forecast was explicit — a sustained hold above $758 opens the door toward higher ground and signals the market wants to extend the rally. That's exactly what happened, as buyers stepped in from the first tick and never once threatened the downside levels mapped out as risk parameters. The $756 and $754 support levels the model flagged were never even tested, confirming the underlying bullish structure the framework anticipated heading into Tuesday.

The session's high of $773.41 and close of $771.23 pushed well beyond the model's $758 maximum upside target, 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 ceiling. That said, the level architecture performed precisely as designed — $758 flipped cleanly from resistance to support and never looked back, and the directional map kept traders oriented correctly throughout the entire session. Traders positioned long from the $754-755 pullback scenario or the $757.64 closing anchor captured the vast majority of Tuesday's 1.79% gain. Risk management protocols kept exposure protected at every stage. The VIX rising 3.47% to 16.41 introduced a modest uptick in implied volatility consistent with a fast, newsflow-driven extension — the kind of move the framework accounts for by keeping stop-losses disciplined and position sizing measured. The model adapts in real time, and a session like Tuesday — where the bullish bias, upside level structure, and momentum all aligned from the open — is precisely what the framework is built to identify and capitalize on.

Premarket Analysis Summary
The premarket analysis posted at market open identified SPY spot at $760.57 in a call-dominated environment, extending the prior session's push and trading at fresh highs above the $760 mark heading into Tuesday. The expected move was framed with $768 as the maximum upside cap and $755 as the maximum downside floor. The defining gate above was set at $762 — the key confirmation level where buyers would prove the run had continuation, opening the path toward $763, then $765 as the next decision point where sellers could step up, $766 as the expected move top, and $768 as the ceiling of the range. The bias leaned clearly constructive given the call-dominated structure and relentless buying off the prior week's lows, with the analysis noting that as long as $762 got cleared and held, the tape belonged to the bulls. On the downside, $760 was flagged as the immediate floor just below spot, with $759 identified as the level where selling could pick up speed, $757 marked as the most important battleground carrying the heaviest support concentration, and $755 as the max downside floor if $757 gave way cleanly.

The actual session didn't just validate the bullish setup — it absolutely ran it over. SPY opened at $760.63, held the $760 floor almost to the penny with a session low of $760.52, and then proceeded to blow through every upside target on the board, printing a session high of $773.41 and closing at $771.23 for a 1.79% gain on near-average volume. The $768 max upside cap was cleared with authority, and every level the premarket identified above — $762, $763, $765, $766, and $768 — were all taken out in succession as buyers never let sellers establish a foothold. The VIX rising 3.47% to 16.41 was the one wrinkle, suggesting some hedging activity even amid the surge, but it did nothing to slow the tape as the call-dominated structure played out well beyond its expected boundaries.

Validation of the Analysis
Tuesday's session was a masterclass in price action following a premarket script, with SPY executing almost perfectly against the projected framework and delivering clean, actionable trading opportunities for anyone who had the analysis in front of them. The open at $760.63 landed just a hair above the 760 immediate floor and essentially right on the 760.57 spot price the premarket flagged — that kind of precision at the open tells you the framework is dialed in before the first trade even prints. The session low of $760.52 held the 760 floor with surgical tightness, tagging it almost to the penny and immediately rejecting lower, exactly the scenario the analysis described when it said 760 was the immediate floor and losing it cleanly would take steam out of the move. Buyers refused to give an inch below it, and the tape never looked back.

What followed was a sustained, powerful move that validated every upside target the premarket laid out. SPY cleared 762 — the gate the analysis called the defining level and next confirmation — and once that broke, the framework's roadmap lit up one target at a time. Price pushed through 763, then 765, then powered past 766, which the premarket identified as the expected move top, and kept right on going to a session high of $773.41. That's a run that blew through every upside target in order, giving traders multiple entry confirmations along the way and rewarding anyone who respected the long side as long as 762 held. The close at $771.23 locked in well above every projected level and represented a 1.79% gain on near-average volume — a legitimate, broad trending day with real conviction behind it. The VIX ticking up 3.47% to 16.41 was the only wrinkle, but it didn't slow the tape down one bit. The premarket said buyers were relentless and the market was theirs to control — Tuesday proved that in full.

Looking Ahead
Wednesday's economic calendar is quiet, with no high-impact releases scheduled to drive any major moves. That gives traders another clean session to focus on positioning and let the market continue to find its footing heading into the back half of the week.

With nothing on the tape to force a reaction Wednesday, all eyes are already locked on Friday's monster jobs report — Average Hourly Earnings, Non-Farm Payrolls, and the Unemployment Rate all dropping at the same time. That trio has the firepower to reprice the market in a hurry, so Wednesday becomes less about reacting and more about preparing. Get your levels set, manage your exposure, and know exactly how you want to be positioned before that data hits Friday morning.

Market Sentiment and Key Levels
The directional bias today leans bullish, though the session comes with an asterisk worth paying attention to. SPY gained 1.79% and closed at $771.23 with volume of 58.65 million shares near average, meaning the advance had reasonable participation behind it rather than being a thin, easy-to-fade move. Breadth was solid across the board — the Nasdaq surging 2.59%, the Russell 2000 climbing 1.96%, and the Dow adding 1.71% all confirm this wasn't a narrow, mega-cap-driven lift. That kind of broad participation is typically what separates a durable move from a one-day wonder. The complicating factor is the VIX, which rose 3.47% to 16.41 on a strong up day — that's an unusual combination. When fear gauges tick higher even as the index rallies, it often signals hedging activity underneath the surface, and it's worth treating as a yellow flag even if the bulls are currently holding the wheel.

Key resistance sits at $773.41, the intraday high from today's session. A clean push above that level on healthy volume would open the door toward the $778 to $782 range, where SPY is likely to run into the next meaningful layer of overhead supply. If that zone gets cleared with conviction, the bull case gains serious momentum heading into the near term. On the support side, $760.52 marks the session low and the immediate floor if sellers decide to press. A break below that on elevated volume would raise real questions about whether today's rally had staying power, and a slide back toward the $755 area could follow quickly. Gold's 2.48% surge to $4,134 adds an interesting wrinkle — that kind of move in the safe-haven trade alongside an equity rally suggests the market is running two competing narratives at once. Add in the VIX uptick and the bears aren't gone, they're just quieter today. The bulls hold the edge, but this one deserves close watching.

Expected Price Action
Wednesday's session brings actionable intelligence generated by our AI model, with SPY projected to trade within a range defined by $755 on the downside and $768 as the max upside target. That thirteen-point window clears the trending threshold, meaning Wednesday is set up for directional movement rather than sideways consolidation. With Tuesday's close at $771.23 sitting above the premarket's expected move top of $768, the bulls have already pushed beyond the projected ceiling — a sign of genuine momentum and a tape that continues to reward buyers who stayed with the trend.

The $768 level becomes the first major reference point heading into Wednesday. What was resistance on the way up should now flip to support, and whether buyers defend it on any early dip will tell you a lot about whether this extension has legs or is running on fumes. Above current levels, $773 — Tuesday's session high — is the next ceiling to watch, and a clean hold above it keeps the bullish structure fully intact. On the downside, if $768 gives way cleanly, $766 becomes the next line in the sand, followed by $765 as another key decision point. Losing $765 would shift the tone cautiously and put $763 in play, then $762 — the level the premarket model identified as the most critical battle zone and where sellers would put up their heaviest fight. A clean break of $762 would signal the rally is losing its footing and open the door back toward $760 and eventually $757, the floor of the expected move. With the VIX rising 3.47% to 16.41 despite Tuesday's broad gains, there's a quiet undercurrent of hedging activity that warrants respect — the bias remains bullish as long as $768 holds, but a failure there could trigger a fast unwind back toward the heart of the projected range.

Trading Strategy
The VIX rising 3.47% to 16.41 is worth paying attention to even on a broadly green day. When volatility ticks higher alongside an advancing market, it often signals that institutional players are quietly buying protection into strength — not a red flag on its own, but a reminder that the market isn't fully confident in this rally. At 16.41, fear hasn't arrived yet, but it's no longer completely absent either. Traders should dial position sizing back slightly to around 75-85% of normal exposure and keep stop-losses in the 1.0-1.25% range from entry. The near-average volume behind today's advance tells you this was a measured, orderly move rather than a panic-driven squeeze, which is constructive — but the rising VIX suggests you shouldn't be adding size recklessly into extended levels.

In a falling market scenario, the first level to watch is $760-761, which marks today's opening range and early intraday support. A failure to hold $760.52 on a retest opens the door for a short entry targeting $756-757, with stops placed above $765 to guard against a false breakdown. If $756 gives way on meaningful selling pressure, the next meaningful support sits at $752-753, where buyers will need to step in decisively or risk a deeper flush toward the $748-749 zone. Keep short exposure disciplined and don't overstay positions — a VIX at 16.41 can still pivot fast in either direction, and today's broad-based advance built real underlying momentum that won't evaporate without a catalyst.

In a rising market scenario, $771.23 is now the closing anchor, and bulls want to see SPY defend that level on any early morning dip and push toward $773-774, which aligns with today's intraday high. A clean breakout above $773.41 on solid participation sets up a long targeting $776-777, with $780 as the stretch target if momentum continues to build. The more conservative entry is a pullback toward $768-769 that holds and bounces with conviction, with $771 as the first profit zone and $774 on follow-through. Stops on longs belong below $764 to protect against a reversal back into the prior range. With the tape printing gains across every major index and gold adding to the risk-on tone, the bias still leans bullish — but confirm price action and participation at your entry level before committing full size, and let the VIX tell you when the coast is truly clear.

Model’s Projected Range
SPY's projected maximum range for Wednesday is $765 to $779, with the Call side dominating in an expanding band that suggests trending price action with intermittent chop. Wednesday brings no economic news due out so the market will trade on technicals. SPY had a strong session Tuesday, opening at $760.63, tapping a low of $760.52 almost immediately, then pushing steadily higher to a session high of $773.41 before settling at $771.23, up 1.79% on the day — a clean trending move with buyers in control throughout. SPY is trading near our model's first support at $770, and price continues to benefit from easing geopolitical tensions as trade war fears have cooled following recent diplomatic signals out of Washington. On the upside, our model shows the first resistance at $775 — a break above that opens the door toward $779, and on the downside, a failure at $770 puts $765 in play as the next level our model would target. 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, $779, $780, $781, while support rests at $770, $765, $760, $757. Given SPY's close at $771.23 — right on top of first support — we favor buying dips at $770 on any early weakness Wednesday. Bitcoin closed above $64,115, up 1.03%, and the MAG names were mostly green led by NVIDIA up 2.56%, though Amazon was the notable laggard dropping 2.32% — overall the strength across crypto and most of the Mag group supports the broader rally even with that one soft spot. The VIX closed at 16.41, up 3.47%, suggesting elevated fear given that volatility ticked higher even on a strong up day, which is worth watching as it could signal some underlying hedging activity beneath the surface. SPY closed just above the lower line of the uptrend channel, with structural support near $770 keeping the broader trend intact heading into Wednesday's session.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended in a Bullish Trending Market State with SPY closing at $771.23. Since SPY closed just inside MSI resistance, support at $760.29 remains support and resistance at $771.41 remains resistance heading into Wednesday. Extended targets were not printing at the close, though they were visible and printing above during both the AM session and the PM session, providing clear directional guidance throughout the regular trading day. Extended targets were not visible in premarket. The MSI rescaled higher several times in rapid succession during the session, which is a hallmark of a strong trending environment and a clear signal to stay on the right side of the move rather than fight it. Combined with extended targets printing above for the bulk of the session, the only correct posture was to ride the trend and never fade it. The MSI range is wide at an $11.12 spread, which reflects significant momentum and gives price room to continue moving. With the MSI still in a Bullish Trending state and a wide channel heading into Wednesday, the framework is forecasting a slow grind higher, though without extended targets at the close the move may be modest and is likely to find resistance at key levels above. SPY has now gained over 3% in two days and the market may need time to digest those gains, so patience is warranted even if the bullish structure remains intact. MSI support is $760.29 with resistance at $771.41.
Key Levels and Market Movements:
Monday we stated, "Bulls want to see price hold above $746.37 overnight and use that level as a launching pad toward the premarket levels above," and added, "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," while also noting, "a slow grind higher that respects $746.37 as a floor is the most likely bull scenario given the size of Monday's move." Tuesday delivered another decisive statement from the bulls and then some. SPY opened at $760.63 with the Bullish Trending state established immediately, and the session never looked back. Extended targets began printing above during the AM session and held through the PM session, keeping traders anchored firmly to the long side for the duration. The MSI rescaled higher several times in rapid succession, each new level acting as a fresh launching pad rather than a ceiling, and any trader attempting to fade the move or pick a top got run over. Price climbed steadily from the open at $760.63 all the way to a session high of $773.41 before settling at $771.23, a gain of 1.79% on the day. The only trade the framework offered was getting long early in the session and holding as the MSI kept rescaling higher with extended targets confirming the trend. The challenge on a day like this is knowing when to jump on and, more importantly, where to get off, but the extended targets printing above answered both questions by keeping traders long throughout. The VIX rose 3.47% to 16.41, a notable uptick that bears watching even as price pushed higher, and it is a reminder that the current pace of gains is not sustainable indefinitely. 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 how far above prior levels price was running and how difficult it is to chase a trend that has already moved this much. 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:
Wednesday has light economic news so the market is likely to grind higher given the Bullish Trending state at the close, though the move may be modest without extended targets printing to fuel a stronger leg up. SPY has now gained over 3% in two days and QQQ over 5%, and these are not normal moves for the market, so while the Bullish Trending state with a wide $11.12 spread points to a constructive setup for Wednesday, traders should be prepared for the market to digest some of those gains before attempting another push higher. The wide channel is encouraging for bulls, but the absence of extended targets at the close tempers expectations for a continuation of the same magnitude as Monday and Tuesday. Any dip toward $760.29 MSI 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 $760.29 overnight and use that level as a base for pushing toward and eventually through $771.41 MSI resistance. If price tests $760.29 on an early dip and the MSI sustains its Bullish Trending state, that is the cleanest long entry available with a target back toward $771.41 and the premarket levels sitting above. A slow grind that respects $760.29 as a floor is the most likely bull scenario given the extended nature of the recent two-day run.
Bears want to see $760.29 fail as support and price break back below that level with conviction to begin pressing the case for at least a short-term pullback. If the MSI transitions away from its Bullish Trending state early Wednesday and price loses $760.29 decisively, the continuation thesis weakens and shorts gain traction. Any rally back into $760.29 from below that fails to reclaim it would be the cleanest short setup available, though bears remain at a structural disadvantage as long as the MSI holds a Bullish Trending state with a wide channel.
The highest-probability setup for Wednesday is a dip to or near $760.29 that holds and confirms the bullish state, giving traders a clean long entry targeting a push back toward $771.41 and the levels above. If $760.29 gives way, the next meaningful area of interest is well below the current range and a bounce with a confirmed Bullish Trending state would offer a secondary long opportunity. Failed breakdowns near $760.29 remain the cleanest long entries, while any failed rally back into $760.29 from below is the best available short if the state deteriorates. With the VIX rising and two massive back-to-back gains already in the books, the risk of an unexpected catalyst reversing the move is elevated, so sizing and risk management matter more than ever heading into Wednesday.
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 $772 to $810 and higher strike Calls, indicating the Dealers' belief that the market is approaching a near-term ceiling. The ceiling for Wednesday appears to be $780. To the downside, Dealers are buying $758 to $710 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 $759 to $771 range — Dealers do not sell ATM Puts unless they believe there is a floor in the market at $759. This is a meaningful signal, as Dealers only sell ATM Puts when they are fairly certain the market will move higher, and they have been spot on the last two days with every indication they will cash in again on Wednesday. Dealers remain heavily hedged but have reduced their hedges to the point where they are signaling the bull market will continue moving higher. For Wednesday, below $757 is bearish and above $758 is bullish, with chop expected in between. There is heavy resistance at $775 but little above that level to slow price — can anyone say SPY $800? We noted yesterday that a break above $760 that holds would likely push SPY to new all-time highs at $763 as a minimum target, and sure enough Tuesday delivered exactly that. Below $757 there is little to support prices from falling, though that remains an unlikely scenario absent a major catalyst. Dealer positioning is unchanged at bullish.
Looking Ahead to Next Friday:
Dealers are selling SPY $772 to $820 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 $780. To the downside, Dealers are buying $759 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 are also selling ATM Puts in the $760 to $771 range — Dealers do not sell ATM Puts unless they believe there is a floor in the market at $759, 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 push this market to new highs, with record earnings and CAPEX spending fueling the move, and the potential for an end to the war in the Middle East has the market looking strong enough to continue higher into year end. We recommend traders remain bullish above $760 but below $753 stay bearish, with chop expected in between. There is major support at $760 with major resistance at $775, 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
SPY closed strong at $771.23 with VIX rising 3.47% to 16.41 — that VIX uptick despite a bullish tape is worth watching. Favor longs on dips toward $765–$767, with stops below $760.52. Resistance is near $773–$775, so trim into strength if price stalls at those levels.

Size down in the face of rising volatility and protect gains with disciplined stops. 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!