Market Insights: Friday, August 8th, 2025

Market Overview

US stocks ended the week with another strong push higher as investors weighed President Trump’s nomination of Stephen Miran to the Federal Reserve Board of Governors and digested the first full trading session under the administration’s sweeping new tariffs. The Nasdaq Composite led the way, climbing nearly 1% to notch its second consecutive record close, while the S&P 500 added 0.8%, finishing just shy of an all-time high. The Dow Jones Industrial Average rose 0.5%, capping a week of gains across all three major indices. Traders appeared willing to look past the latest round of tariff escalations, focusing instead on the growing likelihood that the Fed will cut rates in September following last week’s disappointing labor data.

Gold futures, which had recently been pressing record highs, pulled back slightly after the White House announced it would issue an executive order to clarify “misinformation” about whether gold bars would face tariffs, following reports suggesting they were not exempt from duties on Swiss imports. Thursday’s session saw mixed action as the deadline for countries to secure tariff exemptions expired, sparking fresh duties on dozens of nations before markets reversed higher on news of Miran’s nomination.

Miran, currently the chairman of the Council of Economic Advisors, still faces Senate confirmation, a process that could stretch into September given the ongoing August recess. His nomination also adds another dimension to speculation over Trump’s choice for the next Fed chair, with current governor Christopher Waller reportedly favored internally. The market now sees roughly a 90% probability of a September rate cut, and all eyes will turn to next Tuesday’s inflation data for confirmation. With the Fed’s Jackson Hole symposium later this month, investors are betting that a more dovish tone will carry markets into the fall.

SPY Performance

SPY climbed 0.78% to close at $637.17, opening at $634.15 and reaching an intraday high of $637.65. The ETF found early support at $633.74 before grinding higher through the day. Volume came in slightly below average at 57.58 million shares, typical of August’s slower trading pace, but the close near the highs reinforced the bullish tone heading into the weekend.

Major Indices Performance

The Nasdaq once again led the session, rising 0.98% to a fresh record close on broad strength in large-cap tech. The S&P 500 followed with a 0.78% gain, inching closer to record territory, while the Dow added 0.47% in a steady climb. The Russell 2000 lagged but still managed a 0.17% advance. Gains were supported by optimism around a September rate cut and resilient earnings trends, with growth and tech sectors outperforming more defensive areas.

Notable Stock Movements

The Magnificent Seven enjoyed a mostly green session, with only Amazon slipping, down 0.20%. Leaders like Nvidia, Tesla, and Meta posted solid gains, helping to propel the Nasdaq to new highs. Microsoft, Alphabet, and Apple also traded firmly higher, keeping mega-cap momentum intact. The lone pullback in Amazon did little to dampen the upbeat sentiment, as the group continues to anchor the market’s upward bias.

Commodity and Cryptocurrency Updates

Crude oil extended its recent pullback, falling 0.83% to $63.35. Our model has maintained a bearish view for months, targeting $60 sometime this year. Gold rose slightly by 0.09% to $3,456 despite easing from record levels. Bitcoin dipped 0.33%, settling above $116,800, as crypto markets consolidated recent gains alongside equities.

Treasury Yield Information

The 10-year Treasury yield climbed 0.63% to 4.283%, remaining safely below the critical 4.5% threshold that could start to pressure equities. While yields are elevated, the current range continues to support risk assets. A breakout above 4.8% would be an early warning sign, with 5% marking a more serious inflection point and 5.2% likely triggering a 20% or greater market correction.

Previous Day’s Forecast Analysis

Yesterday’s forecast called for SPY to trade between $629 and $637 with a bullish bias above $632. The model highlighted resistance at $635 and $638, and support at $630, $627, and $625. Long trades were favored above $630, with shorts considered near resistance or on breaks below $630. The strategy emphasized buying dips with the potential for an afternoon push if momentum held.

Market Performance vs. Forecast

SPY’s actual performance exceeded expectations, with the session trading above the bias level nearly the entire day. After opening at $634.15, the ETF never tested lower support, instead rallying steadily to close just below the $638 resistance zone. The move aligned closely with the projected range and bias, offering clean long setups on early support tests and confirming the bullish call. Traders who followed the plan could have captured gains from the early bounce toward resistance.

Premarket Analysis Summary

In today’s premarket report posted at 7:03 AM, SPY was trading at $634.40 with a bias level at $632.85. The analysis favored long entries above this level, targeting $638.10 and potentially $640. Caution was advised for shorts, with an expectation that dips would be aggressively bought. On the downside, a break below the bias could lead to consolidation toward $630 or $626.15.

Validation of the Analysis

The premarket framework proved highly accurate. SPY held above the bias level from the open, grinding steadily toward the $638.10 target and closing just shy of it. No downside break materialized, reinforcing the strategy of buying dips above bias. The day’s price action mirrored the anticipated slow but steady advance, validating the key levels and confirming the model’s effectiveness in guiding intraday positioning.

Looking Ahead

Next week’s major catalyst will be Tuesday’s CPI release, which could reshape expectations for the September Fed decision. Monday has no economic reports, so price action may be technical in nature, with positioning adjustments ahead of the inflation data. Traders should remain alert for early-week headline risk in case of surprise geopolitical or trade developments.

Market Sentiment and Key Levels

SPY sits at $637.17, holding firmly above the $635 pivot and keeping bulls in control. Sentiment remains bullish with momentum carrying toward resistance at $638, $640, and $645. Support levels to watch are $635, $630, and $625. Above $640, the path opens toward new highs, while a break under $630 could spark a test of $625 or $620. The near-term battle is likely to center in the $635–$640 zone.

Expected Price Action

Our AI model projects SPY to trade between $635 and $641 on Monday, an actionable range pointing to continued bullish drift. The bias remains higher above $635, with a breakout over $640 likely targeting $645. A drop below $634 could shift momentum toward $630 or $625. Absent a shock headline, the market is likely to remain in its upward channel, with consolidation phases followed by attempts at fresh highs. This forecast is actionable intelligence generated by our AI model.

Trading Strategy

Long trades remain favorable above $635, with targets at $638, $640, and $645. Shorts may be considered on failed breakouts near $640 or if SPY breaks below $635, targeting $630 and $625. Given the VIX at 16.52, volatility remains low, but traders should guard against sudden spikes ahead of Tuesday’s CPI release. Smaller position sizes and tight stops are advisable in case of unexpected swings.

Model’s Projected Range

The model projects SPY’s maximum range for Monday between $632.50 and $642.25, with the Call side dominating in a steady band, suggesting consolidating price action punctuated by periods of trending moves. Overnight, markets drifted higher as anticipated in yesterday’s newsletter. SPY opened just above $634, rallied to an intraday high of $637.65, and closed above $637, marking another strong performance for the market. Investors are responding to growing expectations that the Federal Reserve will lower rates in September, given recent softness in jobs data. Earnings have also been broadly strong, and with markets being forward-looking, sentiment points to this strength continuing into year-end, potentially pushing SPY as high as $700. While the day wasn’t a straight-line rally, opening near the lows and closing near the highs on slightly below-average summer volume is a constructive sign for the near term. Since reclaiming the $585 level, SPY has maintained a strong uptrend, with dips consistently bought, and that trend is likely to persist unless weakness emerges in leading names or a major external catalyst disrupts momentum. With a close above $635, little stands in the way of new all-time highs in the coming days, with resistance at $640 and $645, and the $638–$645 zone expected to offer strong resistance. Support sits at $635, $630, and $625, with a break below $625 risking a swift drop to $620. Over the weekend, bulls will likely focus on defending $635, aiming for a push to $640 where a pause or reaction is probable, which could mean a break of the prior all-time high toward $641, followed by a consolidation or minor pullback before attempting $645 later in the week. For bears to gain any traction, a decisive break below $630 is needed; as long as SPY holds above this level, dip-buying is expected to persist, paving the way for more new highs. While seasonal volatility from August through October typically favors bears, they remain sidelined as bulls dominate the broader narrative, with SPY continuing to trade above the lower bounds of the bullish channel from the April lows. Meanwhile, the VIX fell 1.42% to 16.52, supporting the bullish narrative. We continue to recommend hedging long equity exposure with VIX Calls, anticipating higher volatility into the fall. A VIX below 23 remains supportive of equities, but the current contango structure suggests heightened volatility risk. A breakout above 23 could trigger the 5–10% pullback we’ve been anticipating. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a Bullish Trending Market State, with SPY closing at MSI resistance near the day’s highs. No extended targets printed into the close, but they did print for much of the day, indicating the herd was participating in today’s rally. Overnight the MSI remained in a wide ranging state which rescaled in the premarket to a bullish state which remained for the entire day. The MSI rescaled higher just once at 2 pm which saw price reach the day’s highs implying the likelihood of even higher prices on Monday. MSI support is currently $635.01 with resistance at $637.64.
Key Levels and Market Movements:
On Thursday, we wrote: “Friday brings no significant news, so the market is likely to continue doing what it has been, trending higher,” and added: “our model favors the bulls, with no consideration for the bears.” We also noted: “we expect a test of MSI resistance at $634, with an upward bias likely to continue overnight. As long as $632 holds, we expect continued upward momentum.” With this context and the MSI in a wide Bullish Trending Market State with SPY sitting at support, we entered long at the open on a double bottom at $634.25 with a first target at MSI resistance at $636.50. T1 hit quickly, so with extended targets printing above, we looked to the premarket for T2 and set a target at $638.10. SPY then pulled back into the MSI, raising concern it might not break higher, and by noon a less-than-perfect failed breakout had us considering taking off T2. However, with extended targets still printing and the herd firmly behind the trend, we moved our stop to breakeven and held. At 2 p.m., the MSI rescaled higher, prompting us to adjust our second target to MSI resistance at $637.50. With just 10% of our position left, we decided to trail into the close, ultimately exiting just above MSI resistance for a one-and-done day. A very strong trade and an excellent wrap to the week without a single losing trade. Once again, our success was thanks to having a clear plan, disciplined execution, and strong alignment between MSI’s directional cues, our broader market model, and key technical levels. The MSI remains a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Monday brings no significant economic news, and with earnings season wrapping up, the market will likely continue trending higher while awaiting an external catalyst to spark a meaningful pullback and trigger dip-buying. While the current administration presents ongoing macro risks, absent a clear catalyst our model favors the bulls following the close above $635, with no consideration for the bears. We expect new all-time highs next week, though a pullback toward $625 remains possible; such a move would likely be bought, allowing the market to resume its push higher. For bears to re-enter meaningfully, a clean break of $630 is needed, which could open the door to $625 as a temporary floor for dip-buyers, while a confirmed break below $600 would materially shift the outlook and raise the risk of a 9–10% correction. The MSI remains in a Bullish Trending Market State, and we expect SPY to push toward $640, with a new all-time high possible as soon as Sunday or in the premarket. As long as $635 holds, upward momentum is expected to persist; failure there could send SPY back to $630, where buying interest would likely reappear. We recommend focusing on long setups above $630, while shorts may be considered on a break below $625 or a push above $640, as increased two-way action is anticipated during the session. 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 $638 to $655 and higher strike Calls while also selling $635 to $637 Puts implying the Dealers belief that price will move higher on Monday and not fall below $635. Dealers do not sell near the money Puts unless they are convinced prices will move higher. The ceiling for Monday appears to be $640. To the downside, Dealers are buying $634 to $575 and lower strike Puts in a 3:1 ratio to the Calls/Puts they’re selling/buying continuing to display little concern that prices could move much lower on Monday. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.
Looking Ahead to Next Friday:
Dealers are selling SPY $638 to $655 and higher strike Calls while also selling very small quantities of $635 to $637 Puts implying the Dealers belief that prices will continue to rally next week with a likely floor at $635. Dealers are not heavily selling near to the money Puts. The ceiling for the week appears to be $650 although $645 also poses material resistance. To the downside, Dealers are buying $634 to $575 and lower strike Puts in a 5:1 ratio to the Calls/Puts they’re selling/buying, reflecting a bearish outlook for next week. For the week Dealer positioning is unchanged from bearish to 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 remains firmly above $635, keeping bulls in control and favoring long trades on dips toward this level. Upside targets at $638, $640, and $645 remain in play, with the potential for a breakout if momentum persists. Short opportunities may emerge on failed breakouts near $640 or a break under $635, with targets at $630 and $625. The VIX at 16.52 signals low volatility, but traders should still size positions conservatively ahead of next week’s CPI report. Review the premarket analysis posted before 9 AM ET for the latest model updates and changes in Dealer Positioning.

Good luck and good trading!