Market Insights: Monday, September 29th, 2025

Market Overview

US stocks edged higher Monday as investors monitored the rising likelihood of a government shutdown that could delay Friday’s highly anticipated jobs report and further disrupt the macroeconomic landscape. The S&P 500 gained 0.27%, the Nasdaq rose 0.48%, and the Dow added 0.15% in a modest session that extended Friday’s rally, though concerns over fiscal gridlock and Fed policy continue to weigh on broader sentiment.

Markets are closely watching Capitol Hill as negotiations between Republicans and Democrats hit an impasse, with a Wednesday shutdown deadline fast approaching. Former President Trump set a meeting with congressional leaders Monday, considered a last-ditch effort to avoid a lapse in government funding. According to prediction market Polymarket, the odds of a shutdown remain elevated near 80%. The Department of Labor announced that, if a shutdown occurs, the Bureau of Labor Statistics will suspend all operations, meaning economic data scheduled for release—including Friday’s key nonfarm payrolls report—would be delayed.

The looming absence of fresh data puts additional pressure on last week’s releases, where jobless claims came in light and GDP growth was revised sharply higher. These trends are fueling speculation that the Fed may not ease rates as aggressively as some hope. Meanwhile, inflation expectations remain firm, especially as last week’s core PCE print held at 2.9% year-over-year—well above the central bank’s target. Forecasts for the September jobs report call for a gain of just 43,000 jobs and an unchanged unemployment rate of 4.3%. The data—if released—will play a major role in guiding policy expectations and market direction into year-end.

AI-related names rebounded slightly after last week’s weakness, but traders are treading carefully amid signs of fatigue in tech leadership. Adding to the complexity, President Trump unveiled additional tariffs Monday, targeting movies and furniture, expanding last week’s aggressive trade posture. Despite that, equities have managed to stay afloat, with the S&P 500 up 2.8% in September and the Nasdaq climbing 2.9%, keeping the door open for a green Q3 close. Gold surged to new highs on Monday, adding to its strong year-to-date run and reflecting persistent demand for defensive assets as uncertainty mounts.

SPY Performance

SPY gained 0.27% to close at $663.63 after opening at $664.32 and trading between $661.87 and $665.20. Volume was average at 68.96 million shares. Monday’s price action was tight but bullish, with SPY holding above $660 and reclaiming the $663 level by the close. Bulls defended multiple intraday dips below $662, while the ceiling at $665 remained intact. The session lacked conviction but reinforced the short-term uptrend, putting SPY back on track to potentially test all-time highs if resistance is cleared.

Major Indices Performance

The Nasdaq led the advance with a 0.48% gain, followed by the S&P 500 at +0.27% and the Dow at +0.15%. The Russell 2000 slipped 0.03%, continuing to underperform. Among the Magnificent Seven, most stocks closed green except Apple, Netflix, and Alphabet. Alphabet led the declines with a 0.98% drop. The group remains a key driver of index performance, and ongoing divergence highlights investor caution even as broader indices edge higher.

Notable Stock Movements

Most of the Mag Seven rallied Monday, but weakness in Apple, Netflix, and Alphabet capped gains. Alphabet was the biggest decliner, down nearly 1%, while Tesla and Nvidia showed relative strength. Energy stocks lagged as crude oil dropped sharply, while gold miners gained on the precious metal’s breakout to new highs. Traders remain highly selective and are beginning to rotate into defensive names amid rising macro and political uncertainty.

Commodity and Cryptocurrency Updates

Crude oil fell 3.77% to settle at $63.24, continuing a sharp pullback that aligns with our model’s long-standing call for a move toward $60 before year-end. Gold rallied 1.26% to close at $3,857, hitting a new record high. The rally in gold underscores investor appetite for safety amid rising volatility and policy risk. Bitcoin rebounded 3.08% to close above $114,200, recovering some of last week’s losses. Crypto continues to trade as a liquidity barometer, and gains in Bitcoin suggest improving risk sentiment—for now.

Treasury Yield Information

The 10-year Treasury yield fell 1.0% to close at 4.145%. While still elevated, the move lower eased some of the recent pressure on equities. However, yields above 4.5% remain problematic, with any move above 4.8% likely sparking broad equity weakness. A 5% handle could trigger a 20% correction, with 5.2% marking a potential inflection point for a full-blown bear market. For now, rates remain a critical focus.

Previous Day’s Forecast Analysis

Friday’s model projected a range between $655.75 and $667, noting that bulls needed a clean close above $663 to reclaim control. Support at $658 and resistance at $663 were highlighted as key levels. The model called for bulls to buy dips at $655–$658 and attempt to break above $663 resistance, setting the stage for a potential rally if that level could be reclaimed.

Market Performance vs. Forecast

Monday’s action aligned closely with the model’s forecast. SPY opened above $664, dipped slightly, but held above key support at $661.87, and closed just above $663. The test of $665 resistance proved sticky, as expected. With price holding above the bull control zone, the model’s roadmap accurately captured the sideways grind with a bullish bias.

Premarket Analysis Summary

Monday’s premarket report, posted at 8:22 AM, set the bias level at $664.35 and noted that long setups were favored above that mark. Upside targets included $666.35 and $670, while downside support sat at $664.35, $662, and $661. A drop below $661 would open $659.85, but the report noted that level was unlikely to be tested. The analysis called for consolidation if $664.35 failed, but a push toward resistance if buyers held above it.

Validation of the Analysis

The roadmap delivered once again. SPY opened near the bias level and briefly dipped below, but buyers quickly regained control. The $662 and $661 support zones were tested but held, confirming the roadmap’s downside boundary. SPY rallied into $665 and closed just below that level, in line with the expected outcome. Once again, the roadmap and MSI alignment produced clear and actionable results.

Looking Ahead

Tuesday brings the JOLTS Job Openings report, but the market impact is expected to be minimal. The bigger concern remains the Wednesday government shutdown deadline, with a failure to reach a deal likely delaying Friday’s jobs report and triggering short-term volatility. With SPY above $663, bulls are close to resuming full control. A break above $665 and $667 would open the door to a retest of all-time highs. However, any reversal below $661–$660 may shift momentum quickly back to the bears.

Market Sentiment and Key Levels

SPY closed at $663.63, just above the critical $663 pivot. Resistance lies at $665, $667, and $670, with a major ceiling above at $672. Support sits at $661, $657, $655, and $650. The $663–$665 zone remains the battleground for control. Bulls need to push through $667 to confirm upside momentum, while bears must break $655 to reassert pressure. The market remains vulnerable to headlines, especially around the shutdown and Friday’s job data.

Expected Price Action

SPY is projected to trade between $658.50 and $668.75 on Tuesday, with the Call side dominating. Price is expected to trend with intermittent chop, given the lack of major catalysts. The potential government shutdown on Wednesday continues to weigh on sentiment, but dip buyers remain active. If bulls can press through $667, momentum could accelerate toward all-time highs. Conversely, a break below $655 would mark a shift back toward short-term weakness.

Trading Strategy

Long setups are favored above $663, with dips to $661 or $657 offering buy zones. Resistance targets sit at $665, $667, and $670. Shorts are preferred on failed breakouts near $667 or if price drops through $655. The VIX rose 5.43% to 16.12, a notable uptick despite a positive SPY close, suggesting caution. Traders should stay tactical, take quick profits, and reduce risk into key macro events.

Model’s Projected Range

SPY’s projected range for Tuesday sits between $658.50 and $668.75, with the Call side dominating in a steady band that suggests trending price action interlaced with periods of chop. There is little news on Tuesday except for JOLTS Job Openings, which is unlikely to move the market. The market initially moved higher overnight but sold off to end the day up just 28 basis points, adding slightly to Friday’s gains and closing at $663.61, just above the level that defines bull control versus more balanced bull/bear participation. The potential government shutdown on Wednesday is likely muting price action until resolved, though we believe there will be a last-minute deal, which would likely push the market back toward the all-time highs. Volume was average today, providing no clear indication of the path forward, while the bears once again tried to break $660 but were unable to do so as the bulls stepped in to keep prices elevated. With SPY above $663, the bulls are close to taking back full control of the market and pushing toward new highs, and with the index well above the critical $645 threshold and dips still consistently bought, bulls are likely to recover last week’s losses. The bears need to force SPY below $655 to take back near-term control, and if that level fails, the market likely drops to $650, yet a decisive break of $640 would signal a shift in the market and trigger our base case of a 10–15% pullback this year. Reclaiming $663 put the bulls back in charge, but with price hovering around this level we remain cautious until a clear market leader emerges. For Tuesday, resistance sits at $665, $667, and $670, with support at $661, $657, $655, and $650. There is heavy resistance above $667, which likely limits gains, while the $650–$655 range is also dense with support, and below $650 there is little to hold the market up. Since reclaiming $585, SPY has held a steady uptrend fueled by dip buyers, but that trend has now broken for the second day. Mag stocks were mixed today with Alphabet, Apple, and Netflix declining while the others rose. ETH moved back above $4200, and if it continues to recover, this also supports the bull case, as we have long highlighted ETH below $4300 as a leading indicator of market softness, along with consistent weakness in Mag leaders. We continue to favor quick profit-taking and caution with overnight holds. The VIX rose 5.43% to 16.12 in another volatile session, suggesting Futures traders may know something we do not, and surely if you haven’t added protection to your long book, now is the time. VIX below 23 supports the bullish case, but a breakout above it could finally trigger the long-anticipated pullback. SPY closed above the redrawn lower bull trend channel from the April lows, a level we will watch closely to determine whether the uptrend remains intact or if a new bear trend is emerging.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a Trending Market State, with SPY closing mid-range. There were no extended targets for most of the day with brief periods of extended targets above in the overnight session. As a result, SPY traded mostly sideways in a fairly narrow band all day. The MSI rescaled higher overnight to a bullish state with extended targets which saw price reach $665.80 but after the open, Price pulled back and the MSI rescaled lower to a very wide ranging state, then to a very narrow bearish state which did little to contain price. Once SPY reached major support, it reversed and ended the day up slightly. For Tuesday the MSI is implying a sideways price action in a range between $660 and $655 likely as the risk of a government shut down looms. Once resolved we expect the MSI to rescale and to provide clear direction for the rest of the week. MSI support is $662.71 with resistance at $664.40.
Key Levels and Market Movements:
On Friday we wrote, “while the market still skews to the bulls they are no longer in complete control,” and noted, “The bears hold the ball as long as price remains below $663,” while also stating, “Expect more two-way trading, looking to buy dips at major support or short on weakness at or near $663 or on a failed breakout.” With that context, and with the MSI rescaling higher overnight with extended targets printing in the premarket but with price already trading near $666 and major resistance, we waited for an opportunity to either buy MSI support or fade MSI resistance. The latter came just after 10 am and we were short at $665.10 with a stop just above the overnight high. We set T1 at MSI support at $663.45 which was hit before noon, then set T2 at the premarket level, but instead of chasing lower, we shifted gears and wanted to get long to see if SPY could at least retest the PCE highs, and that came right out of the gate on a textbook failed breakdown at MSI support at $659.30 where we went long and set T1 at the premarket level of $660.40. With T1 secured quickly, we set T2 at another premarket level at $662 and when the MSI rescaled lower, we adjusted T2 to MSI support at $662.33. With two targets in hand, we moved our stop to breakeven and trailed, and after a brief drop at 3 pm to another premarket level and a failed breakdown, we went flat at $661.90 and called it a day. One and done, thanks again to a clear plan, disciplined execution, and strong alignment between MSI signals, our broader market model, and key technical levels. The MSI continues to be a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Tuesday has only Jolts, which is unlikely to do much to move the market, but the looming government shutdown is likely to either move prices lower or cause a rally, so be prepared to trade what you see given this macro risk. Absent an external shock, with a close above $663 the market skews to the bulls, but given price is only tentatively holding this level at best, be prepared for a retest of the day’s lows at a minimum, which needs to hold for the bulls to push prices higher. Even if $661 fails to hold, price could move as low as $655 which represents an absolute worst-case level for the bulls, and if $655 fails the market is likely to fall hard with only a pause at $650 on the way to much lower levels. While this is a low probability event, it is worth noting, as good news regarding the government shutdown would allow the bull trend to continue and price to march back toward all-time highs. As such, watch price action tomorrow and look for the MSI to provide direction, with expectations for more two-way trading as we continue to buy dips at major support or short on weakness at or near $665 or on a failed breakout, remembering that the bears come to life in scale only on a drop below $640. 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 $667 to $680 and higher strike Calls while buying $664-$666 Calls implying the Dealers belief that prices may continue higher on Tuesday and as such, they wish to participate in any rally. The ceiling for Monday appears to be $667. To the downside, Dealers are buying $663 to $600 and lower strike Puts in a 3:1 ratio to the Calls they’re selling/buying displaying little concern that prices could move lower on Tuesday. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.
Looking Ahead to Friday:
Dealers are selling SPY $664 to $690 and higher strike Calls implying the Dealers belief that prices may tread water near current levels. The ceiling for the week appears to be $670. To the downside, Dealers are buying $663 to $540 and lower strike Puts in a 3:1 ratio to the Calls they’re selling, reflecting a bearish to neutral outlook for the week. For the week Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral. 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 at $663.63, reclaiming bull control but stopping short of a breakout. Bulls must press through $667 to reassert momentum, while bears need a break of $655 to regain control. With quarter-end and macro uncertainty looming, expect volatility. Trade level to level, stay disciplined, and respect MSI alignment for optimal setups.

Good luck and good trading!