Market Insights: Thursday, September 17th, 2026
Market Overview
US stocks bounced back Thursday as falling oil prices and some cooler heads on Wall Street helped investors shake off the prior session's Fed-driven selloff. The Dow gained 0.6%, the S&P 500 climbed 1.1%, and the Nasdaq led the way with a 1.7% jump as tech stocks staged a strong recovery. Analysts noted that Fed Chair Kevin Warsh's hawkish tone, while initially rattling markets, ultimately helped restore the Fed's credibility on inflation — and that was enough to get buyers back in. Bond yields eased alongside oil, with Brent crude trading around $104 per barrel after US Energy Secretary Chris Wright signaled that Saudi Arabia's East-West pipeline would be restored soon, offering an alternative route around the Strait of Hormuz. The Bank of England added to the global central bank chatter by holding its benchmark rate steady at 3.75%. Meanwhile, President Trump publicly pushed back on the Fed's decision, saying he called Warsh ahead of the meeting and urged him to vote against the hike.
Crypto stocks caught a bid as Bitcoin recovered, with Coinbase adding 4%, Robinhood up 3%, and Strategy gaining 4%. Coinbase CEO Brian Armstrong finally addressed the failed Senate vote on the CLARITY Act, calling it "an abdication of responsibility" but framing the path forward through the SEC and CFTC as potentially better for Coinbase since broad legislation might have flooded the space with competition. On the AI front, Salesforce CEO Marc Benioff used the Dreamforce conference to call on industry leaders to take AI safety seriously, warning against letting it become "social media 2.0." JPMorgan's Jamie Dimon also weighed in, backing a federal "light touch" approach to AI regulation, arguing that a patchwork of state laws makes commerce nearly impossible to manage.
SPY Performance
SPY opened at $763.15 and essentially told you everything you needed to know right from the jump — the gap higher set the tone, and the bulls never gave it back. The session high of $763.57 came early, and while the range was tight, the close at $762.70 held firm near the top of the day's move. The low of $759.96 was tested briefly but attracted buyers quickly, and that kind of rejection off the lows in a quiet session is actually a constructive sign. The price action was orderly and controlled — no panic, no violent swings — just steady, methodical buying pressure that kept SPY elevated throughout the day.
SPY finished up 1.15%, snapping that three-session losing streak with authority and giving the bulls exactly the kind of session they needed to stop the bleeding. Volume came in at 36.62 million shares, below average, which means this rally was more about a lack of sellers than a flood of aggressive buyers — but you'll take it either way when the alternative was another down close. The VIX cratered 12.59% to close at 15.48, which is the real headline here. A move that sharp in volatility signals that fear didn't just ease — it got unwound in a meaningful way. After three straight sessions of VIX creeping higher, today's reversal is a notable shift in sentiment. One day doesn't erase the damage done earlier this week, but it's a start, and the bears now have some work to do if they want to reclaim the narrative.
Major Indices Performance
The Nasdaq led the charge today, posting a solid 1.69% gain that puts it back in the driver's seat after yesterday's flat showing. The outperformance makes sense — when yields ease up even slightly, growth and tech names tend to get the most immediate relief, and that dynamic played out clearly today. Momentum returned to the index that's been most sensitive to the rate environment all year.
The Dow and Russell 2000 both finished up 0.61%, tying for second on the day. The Dow's gain is respectable but noticeably lagged the Nasdaq, which is fairly typical when the session's energy is concentrated in growth rather than value or blue chips. The Russell's matching performance is mildly encouraging for small-caps, which have been getting beaten up by the rate environment, though a single good day doesn't change the structural story there. Small-cap companies still carry the same debt burdens they did yesterday, so one bounce doesn't mean the coast is clear.
The S&P 500 also closed higher on the day, with broad participation lending some credibility to the rally. Adding to the positive tone, the VIX dropped 12.59% to close at 15.48 — a meaningful pullback in fear that suggests hedging pressure is easing, at least for now. When the VIX drops that aggressively in a single session, it signals traders are unwinding defensive positions, which can act as an additional tailwind for equities in the short run.
Notable Stock Movements
NVIDIA grabbed the spotlight inside the Magnificent Seven today, surging 2.54% to lead the group and set the tone for what turned out to be a broadly constructive session from mega-cap tech. That kind of move from NVIDIA doesn't go unnoticed — it's the heartbeat of the AI infrastructure trade, and when it runs, it tends to pull sentiment higher across the entire complex. A gain of that size signals that institutional money is still willing to chase the AI theme aggressively, and that's a meaningful read on where conviction sits right now.
The overall Magnificent Seven picture was mostly green across the board, which aligned well with the strength showing up in the broader tape today. Unlike recent sessions where the group delivered a split verdict and complicated the narrative, today the mega-caps largely moved together in the right direction. That kind of cohesion from the largest names in the market carries weight — when the Magnificent Seven pulls in the same direction, it tends to provide a lift that filters through the indices and reinforces bullish sentiment more broadly.
The clean sweep from this group fits the risk-on tone that defined the session. With the Nasdaq outperforming its peers, the strength concentrated in the tech and growth-heavy names that make up the Magnificent Seven was clearly a driving force behind that gap. A mostly green day from this complex isn't just a box-check — it's a signal that the mega-cap trade still has legs and that investors are leaning into growth rather than retreating from it. After several sessions of murky signals from this group, today's unified performance offered some much-needed clarity.
Commodity and Cryptocurrency Updates
Crude oil slipped 1.15% today to close at $101.25, but that modest pullback does almost nothing to change the bigger picture. Black gold remains well above any reasonable model expectation, and the structural story driving this elevation — supply constraints, geopolitical pressure, and sticky demand — hasn't shown any real signs of breaking down. One soft session in a market sitting north of $100 is noise, not a trend. Energy at these levels continues to feed directly into the inflation picture, and that makes the Fed's job genuinely harder. A sustained move above $70 was already a complication — crude hanging around $100 is an entirely different animal.
Gold was essentially flat today, slipping just 0.01% to close at $4,387. The metal continues to hold its ground at elevated levels, but there's still no conviction buying that suggests a decisive push higher is imminent. Central bank demand and macro uncertainty remain the structural pillars underneath the trade, but until gold starts closing sessions with real momentum behind it, this looks more like a consolidation phase than the early stages of a breakout.
Bitcoin added 0.51% today, closing just below $76,541, making it two quiet green sessions in a row. That's a decent sign for sentiment, but the crypto market still needs to see sustained follow-through before this qualifies as anything more than a stabilization bounce. The burden of proof remains with the bulls — watching is still smarter than chasing until higher closes start stacking up with some consistency.
Treasury Yield Information
The 10-year Treasury yield finally pulled back today, dropping 1.18% to close at 4.950%. After two consecutive sessions camped above the 5% threshold, that retreat is meaningful — but it's important not to overstate it. One day of relief doesn't erase the pressure that has been building, and at 4.950%, yields are still deep inside the danger zone that the framework identifies as high-risk territory for equities.
Let's be clear about where we stand. The 4.5% level that begins compressing multiples and punishing growth names is still nearly 50 basis points below current trading. The 4.8% crossover that signals a genuine shift in market tone — the level where selling pressure tends to pick up — is 15 basis points in the rearview mirror. So while today's move back below 5% is a welcome development for bulls, the framework isn't flashing anything close to an all-clear. Two levels that historically precede significant equity stress are still firmly overhead, and yields are sitting right between 4.8% and 5%, which is not a comfortable place for stocks to try to stage a durable rally.
What makes today's move interesting is the timing. Equities responded well, posting broad gains across major indices with the VIX dropping sharply. That's the relationship the framework predicts — when yields ease, financial conditions loosen and risk appetite returns. The question is whether this is the beginning of a real retreat or just a one-day exhale after two tough sessions above 5%.
The critical levels to watch remain the same. A convincing move back below 4.8% would shift the tone meaningfully and give bulls a foundation to work from. On the other side, any close back above 5% — especially a sustained one — would signal that today was noise, not a trend change. The 5.2% level that triggers the framework's most severe warning remains the line in the sand, and until yields make a decisive move away from it, the broader risk picture stays cautious.
Previous Day’s Forecast Analysis
Thursday's forecast called for SPY to trade within a $750 to $770 range, a twenty-point window that the model classified as trending territory rather than a consolidation setup. With Wednesday's close at $754.13 sitting in the lower half of that range, the bias heading into Thursday was bearish, and the newsletter leaned on the VIX's continued grind higher as confirmation that sellers remained methodically in control of the tape.
The defining level for the session was $760, flagged for the third consecutive session as the critical gate bulls needed to reclaim. Above there, $761 was the first step, $762 was identified as the heaviest overhead concentration and the level bulls truly needed to clear, with $766 as the next decision point and $770 standing as max upside. On the downside, $759 was the first level to watch, $757 was identified as the most critical battle zone with the heaviest support, and a clean break there was expected to put sellers firmly back in control. Below $757, $754 was the last line of defense before $750 opened as max downside.
The recommended trading strategy sized positions in the 50-60% range with stops kept in the 0.75-1% band from entry. On the long side, the preferred entry was a controlled pullback into the $756-$758 zone, targeting $763-$764 initially and $767-$768 if breadth improved, with stops below $753. On the short side, a rejection at $760-$761 on the first bounce attempt was the trigger, targeting $750-$751 with $747-$748 in play if selling accelerated, and stops above $763. The strategy emphasized not chasing strength above $762 without volume confirmation and covering short positions methodically into support rather than overstaying in a volatile tape capable of snapping back quickly on any unexpected catalyst.
Market Performance vs. Forecast
Thursday's session delivered a decisive bullish resolution that validated the framework's core structural read — the model identified $760 as the critical gate for three straight sessions, and Thursday's tape answered that call with authority. SPY opened at $763.15, immediately above that defining level, which confirmed the upside coil the forecast described had broken in the bulls' favor. The open itself landed squarely inside the $762-$766 corridor the strategy identified as the next decision zone once $762 was cleared, and price held that territory throughout the entire session without revisiting the downside scenarios. The low of $759.96 briefly tested the $759-$760 zone the forecast explicitly flagged as the first level to watch on any intraday softness — it held, buyers absorbed that pressure, and the tape closed at $762.70, right in the heart of the resistance zone the model had been tracking all week. That is not a coincidence — that is the framework doing its job.
The session's bullish gap open did move beyond the falling market scenario the prior forecast outlined as the primary setup given Wednesday's bearish close at $754.13, and the lack of any meaningful retest of the $756-$758 long entry zone meant the controlled pullback entry the rising market playbook preferred never fully materialized. External catalysts drove price action beyond the model's base case scenario at the open, and the model does not account for unpredictable developments that can gap price through key levels before the session begins. That said, any traders positioned long below the prior session's resistance who held through Thursday saw those positions move sharply in their favor. The VIX collapsing 12.59% to 15.48 was the clearest confirmation of the vol thesis running in reverse — the framework had explicitly warned that sustained VIX pressure above 19 would force exposure reduction, and instead fear metrics snapped back hard, unlocking exactly the kind of swift reversal the forecast cautioned short-side traders to respect. Risk management protocols on any short positions established near $760-$761 protected capital from a disorderly move against the trade. The framework correctly identified $760 as the axis the entire tape would pivot around, and Thursday proved that level was indeed the story — the adaptability of this model in tracking structural levels across multiple sessions remains the enduring edge.
Premarket Analysis Summary
The premarket analysis posted at market open set SPY's projected range for the session between $750 as max downside and $770 as max upside, with spot entering at $760.23 in a call-dominated tape coiling on the critical $760 level for a fourth consecutive session. The expected move had widened to eleven points, the largest in a month, signaling that participants were bracing for a real range with serious directional potential heading into the final session of the week. The defining level was $760, identified as the heaviest concentration on the board and the floor of the turn, with the analysis noting that buyers holding it leaned the setup toward an upside resolution. Above $760, $761 was the first step, $763 was the next decision point, $766 was where price should want to stall and the level bulls truly needed to confirm the September slide was behind them, and $770 stood as the max upside and a major round number with significant interest. On the downside, $759 was the first warning level sitting just beneath spot — losing it cleanly would take the shine off the turn — $757 was the next decision point, $753 was identified as the most important level below and the line in the sand where selling could pick up speed fast, and $750 was the max downside, another major round number. The analysis concluded that four days of coiling with a range this wide tends to resolve sharply in one direction.
The market resolved that coil cleanly to the upside, validating the call-dominated bias the premarket had been tracking. SPY opened directly at $763.15, blowing through the $761 first step and clearing $763 right at the gate, which confirmed the bullish resolution the analysis had outlined as the base case for buyers holding $760. Price pushed to a high of $763.57 before settling into a controlled session, ultimately closing at $762.70 — holding comfortably above both $761 and $760 and finishing well within the upside structure the premarket had mapped. The downside levels never came into play, as the tape never threatened $759 with the session low sitting at $759.96. The VIX dropping 12.59% to 15.48 confirmed that the defensive pressure from the prior session had fully unwound, and the weekly close above $762 left bulls in a strong position heading into the following week.
Validation of the Analysis
Today's session delivered a strong validation of the premarket framework, and traders who came in prepared had a clear roadmap from the first tick. The analysis identified 760 as the defining level and the floor of the turn, with the expectation that holding it would lead to an upside resolution toward 761 and then 763. SPY answered that question emphatically at the open, gapping straight through 760 and printing $763.15 on the open — clearing the first two upside targets of 761 and 763 simultaneously and putting bulls immediately in control.
From there, the premarket's upside structure played out with precision. The analysis described 763 as the next decision point after 761, and that's exactly where price found its equilibrium, with the high of $763.57 kissing just above that level before the tape settled into a tight range. The close at $762.70 confirmed that 763 held as support on any intraday softness, exactly the kind of behavior the analysis projected for a level where price "should stall" before the next leg. The low of $759.96 briefly tested 760, the very floor the premarket flagged as critical, and found buyers right there — a clean confirmation that 760 remained the line in the sand as described. The premarket's warning that four days coiled on one level tends to resolve sharply proved right again, with the upside resolution delivering the quick move to 761 and 763 that the analysis outlined as the bull case. The VIX dropping 12.59% to 15.48 confirmed the firming tone the framework anticipated once buyers held the 760 floor and price pushed into the upside targets.
Looking Ahead
With the economic calendar showing no high-impact releases confirmed for Friday, the session sets up as a clean price-action day heading into the close of a full September trading week. No NFP, no Fed speakers, no major data prints — just traders making final positioning decisions before the weekend and deciding whether to carry risk or trim exposure ahead of two open days away from the screen.
That kind of low-catalyst environment puts the weight of the session squarely on technical levels and volume behavior. How the market responds to support and resistance established earlier in the week will matter more than any headline, and end-of-week flows can sometimes produce moves that look decisive but are really just a function of position squaring rather than genuine conviction. The disciplined approach stays the same: respect what the tape is showing, don't overread Friday afternoon action, and keep position sizing tight when there's no scheduled catalyst to validate a directional bet.
Market Sentiment and Key Levels
The directional bias today flips to cautiously bullish, with bulls firmly in control of the session as SPY gained 1.15% and the VIX cratered 12.59% to 15.48 — that kind of volatility compression signals that the hedging crowd is unwinding protection and risk appetite is returning in a meaningful way. The Nasdaq leading with a 1.69% gain tells you growth and technology money was flowing with conviction, and the broader participation across the major indices adds credibility to the move. That said, volume came in at 36.62M, which is below average, and that's the one asterisk worth pinning to today's rally. Gains built on lighter volume are real, but they carry less structural weight than a high-volume breakout — bulls need to see follow-through buying to validate today's price action rather than treating it as a done deal.
Key resistance sits at $763.57, today's session high, which SPY tagged early and couldn't meaningfully extend. A clean push above that level on expanding volume would be technically significant and could unlock a run toward the $765 to $768 zone, where sellers from prior sessions would likely re-engage. On the support side, $759.96 — today's intraday low — is the first line in the sand. A break below that level would be an early warning sign that today's rally is fading, and a more decisive failure could expose the $756 to $757 range as the next area where buyers need to prove themselves. The 10-year yield easing slightly and crude pulling back modestly both removed near-term headwinds for equities, but neither move was dramatic enough to call the all-clear on macro pressure. Bulls are back in the driver's seat, but the conviction test comes with tomorrow's volume.
Expected Price Action
Friday's session brings actionable intelligence generated by our AI model, with SPY projected to trade within a range framed by $750 on the downside and $770 as the max upside target. That twenty-point window puts this squarely in trending territory — traders should expect a directional move with real conviction behind it, not a grind sideways, so having a clear bias before the open is essential. Thursday's close at $762.70 sits in the upper half of the projected range, which shifts the near-term bias bullish heading into Friday. The VIX dropping 12.59% to 15.48 confirms that fear is receding meaningfully, and that kind of sharp compression in volatility tends to keep buyers in control on any brief pullback toward support.
The defining level on Friday remains $763, which the premarket framework identified as the next decision point above spot. If price holds $763 and builds on Thursday's strength, $766 becomes the next major test — that's the level bulls truly need to clear to declare the September slide fully behind them. A clean break above $766 with any conviction opens the door to $770, the max upside target and a major round number with significant interest at that strike. On the downside, $761 is the first line of defense, and losing it cleanly takes some of the shine off Thursday's recovery. Below there, $759 is the next critical zone to watch — a clean break puts $757 in play, and under $757 sellers could pick up speed quickly with $753 as the last meaningful floor before $750 opens as max downside. Four days coiling with the tape now leaning higher tends to resolve with follow-through — hold $763 and $766 comes quickly, but lose $759 and expect very little cushion on the way down.
Trading Strategy
The VIX dropping 12.59% to 15.48 is a genuine green light for the bulls, pulling volatility back into a range that gives systematic accounts room to add exposure and removes one of the more persistent headwinds that had been weighing on risk appetite. At 15.48, the VIX is not signaling complacency yet — it is simply a healthy reset that reflects a market exhaling after a period of elevated uncertainty. What matters now is whether this vol compression is accompanied by follow-through price action that builds on today's gains, or whether it fades into another session of indecisive chop. With below-average volume behind the move, the VIX read deserves some caution — low-vol rallies on thin participation can unwind faster than they develop if a negative catalyst emerges. A drift back above 17 in the VIX would be a warning shot to tighten stops and reduce net long exposure. For now, sizing in the 60-70% range is appropriate with stop-losses kept in the 0.75-1% range from entry, as the tape is constructive but not yet validated by conviction-level volume.
In a rising market scenario, the key level to watch on the long side is a pullback into the $759-$761 zone, where prior intraday lows from today's session provide a natural demand floor. A controlled dip into that range that finds buyers quickly and holds is the preferred long entry, targeting $765-$766 as the initial profit zone, with $769-$770 as a secondary target if broader participation picks up and the session's momentum extends. Stops on longs belong below $757 to avoid getting caught in a failed retest that turns the day's close into a bull trap. Do not aggressively chase price above $763 at the open without seeing volume step in to confirm — price needs to earn the next leg, not just drift into it on thin air.
In a falling market scenario, $763-$764 becomes the overhead resistance zone to watch, and a clean rejection there on the first morning bounce is the short trigger. That setup targets $757-$758 as the initial profit zone, with $753-$754 available if sellers press the advantage and buyers fail to mount any credible defense at the first test of support. Stops on shorts belong above $765 to protect against a squeeze through the session high that flushes out weak short positions. If the tape opens soft and immediately loses $761 without any bounce attempt, that is an actionable short entry at reduced size. With the VIX at 15.48 and trending lower, the risk of a violent short squeeze on any positive catalyst is real — cover into support levels in layers and do not overstay short positions in a vol environment that can reverse sharply without much warning.
Model’s Projected Range
SPY's projected maximum range for Friday is $756 to $769, with the Put side dominating in an expanding band that suggests trending price action with intermittent chop. Friday brings no economic news due out so the market will trade on technicals. SPY closed at $762.70, up 1.15%, after opening at $763.15, tagging a high of $763.57, and dipping to a low of $759.96 before settling near the middle of the day's range on below-average volume. SPY remains in the $760 to $765 range that has defined recent trading, with ongoing trade policy developments continuing to act as a backdrop for market sentiment. Our model shows the first resistance sitting at $765, and a clean break above that level targets $767 next, while the first support below sits at $760, and losing that opens the door toward $756. If $756 gives way, there is little to keep price from falling toward $750. The long-term bull trend remains intact above $640 with SPY well above structural support. As long as price holds above key structural levels, this remains a broader dip-buying environment. Absent a catalyst, resistance sits at $765, $767, $768, $769, while support rests at $760, $756, $755, $750. We favor buying dips at $760 given SPY closed just above that first support level with momentum still tilted to the upside. Bitcoin was essentially flat, up just 0.51% and closing below $76,541, while MAG stocks posted a mostly green day led by NVIDIA up 2.54%, and that leadership strength supports the broader rally and keeps the bull case alive heading into the weekend. The VIX closed at 15.48, down 12.59%, suggesting a significant reduction in fear as traders rotated out of hedges and leaned into the equity bounce. SPY closed near the upper portion of its short-term trend channel, with structural support near $760 keeping the near-term setup constructive as long as that level holds.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended in a Bullish Trending Market State with SPY closing at $762.70. Since SPY closed above MSI resistance at $760.72, that former resistance now becomes support heading into Friday. Extended targets were not printing at the close, though they were active during premarket and into the AM session, printing above as the MSI rescaled higher overnight several times to a bullish state. Those extended targets pushed SPY beyond major resistance at $760, which then flipped to major support. Once that level held, the MSI stayed in a Bullish Trending state for the remainder of the session without another rescale, and SPY ground steadily higher throughout the day. The absence of extended targets at the close tells an important story — the MSI is forecasting additional strength into Friday, but the move is likely to be modest and may encounter resistance at key levels above. The moderate $2.18 spread reflects a market with enough room to move but not one coiling for a big directional burst. With the VIX dropping sharply and SPY pushing solidly back above the 50 DMA, bulls clearly had control of the session. MSI support is $758.54 with resistance at $760.72.
Key Levels and Market Movements:
Wednesday we stated, "Bulls want to see overnight price hold above $752.01 MSI support and push toward $753.80 resistance turned support and beyond," and added, "If the MSI rescales into a Bullish Trending state with extended targets above, the FOMC selloff may prove to be a buying opportunity and price could push back toward $758-$760," while also noting, "Failed breakouts and failed breakdowns are the highest-probability setups." Thursday delivered exactly what the bulls needed and then some. The MSI rescaled higher overnight several times into a Bullish Trending state with extended targets printing above, and that momentum carried SPY right through $758 and $760, transforming those former resistance levels into support before the regular session even opened. SPY opened at $763.15 and while it dipped to a session low of $759.96 early on, that pullback was quickly absorbed right at the newly established support zone around $760 — precisely the area the MSI identified as the line in the sand. That test of $760 with the MSI in a Bullish Trending state and extended targets printing above was the primary trade of the session — a long entry off MSI resistance turned support targeting premarket levels above. The trade worked cleanly as SPY pushed back toward the session high of $763.57, confirming bulls had regained control. Extended targets stopped printing during the PM session, and the market settled into a slow grind, closing at $762.70. We never fade extended targets, and any attempt to do so today would have failed. With just one high-quality setup that delivered a clean directional move, it was an easy day to read and execute with substantial setups, all identified through proper context, patience, and flexibility while leveraging the MSI, premarket levels, and market structure rather than forcing trades. At minimum it was a one-for-one session for traders following the framework. The MSI continues to prove its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
Friday 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 at the close, the MSI is signaling that Friday's upside may be measured rather than explosive, and traders should expect potential resistance at key levels above before any sustained continuation. The moderate $2.18 range leaves enough room for price to work in either direction, but the Bullish Trending state gives bulls the edge heading into the session. Bulls want to see overnight price hold above $760.72, the former resistance that has now flipped to support, and push toward the next meaningful level above. If the MSI rescales higher overnight with extended targets printing above, the slow grind could accelerate and bring the next major resistance zone into play. Bears want to see $760.72 fail and price press back toward $758.54 MSI support. If $758.54 gives way and the MSI rescales into a Bearish Trending state, the overnight gains could unwind quickly and erase much of Thursday's recovery. The highest-probability setup for Friday is buying dips to $760.72 MSI support-turned-resistance as long as the MSI remains in a Bullish Trending state. If extended targets print above at the open, that long bias becomes even more compelling. Failed breakouts above key resistance and failed breakdowns below $760.72 remain the setups with the best risk-reward profile. 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 $766 to $783 and higher strike Calls while buying $763 to $765 Calls, indicating the Dealers' desire to participate in any continuation of the rally on Friday. The ceiling for Friday appears to be $767. To the downside, Dealers are buying $762 to $675 and lower strike Puts in a 2:1 ratio to the Calls they're selling, displaying reduced concern that prices could move lower, as Dealers have significantly cut their hedges signaling they expect higher prices on Friday. Dealers are buying small quantities of ATM Calls looking to participate in any continuation of the rally on Friday. Below $760 is bearish and above $765 is bullish with everything in between being choppy and trap filled. Should SPY fail to hold $760, $755 is in play. Above $765, $767 will provide a meaningful test of resistance that will keep prices from moving much higher without an external catalyst. Dealer positioning is unchanged at bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $768 to $800 and higher strike Calls while buying $763 to $767 Calls, indicating the Dealers' desire to participate in any continuation of next week's recovery. The ceiling for the week appears to be $780. To the downside, Dealers are buying $762 to $720 and lower strike Puts in a 3:1 ratio to the Calls they're selling, displaying moderate concern that prices could move lower, though Dealers have reduced their hedges substantially indicating some belief that the market may move higher next week. Dealers are buying ATM Calls in small size looking for a continuation of the recent recovery. Above $765 is bullish with heavy resistance at $770. Below $755 the market is bearish with everything in between being nothing but chop — a wide range that implies more two-way, choppy trading than a significant continuation of the rally. 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 $762.70 and the 10-year yield still sitting at 4.950, we're in tricky territory — above 4.8% is where selling pressure tends to build, so don't get too comfortable with today's bounce. Favor cautious longs above $762 with stops below $759.96, and watch for shorts if price fails to hold that level on any retest. VIX dropping 12.59% to 15.48 gives bulls some breathing room, but don't chase.
Keep size in check — below-average volume on a up day isn't exactly a conviction signal. 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!
