Market Insights: Wednesday, September 2nd, 2026

Market Overview
Stocks snapped a two-day losing streak on Wednesday as oil prices stalled their rally and a key Fed official eased fears of an imminent rate hike. The Dow rose 0.6%, the S&P 500 gained roughly 0.4%, and the Nasdaq climbed about 0.4%, with all three major averages recovering from earlier losses as Treasury yields eased slightly. New York Fed President John Williams told CNBC there were "no clear signs right now" that a September rate hike would be needed, and he suggested the recent rise in bond yields may reflect a strong economy rather than runaway inflation expectations — a comment that meaningfully shifted market sentiment through the afternoon. Oil remained elevated with Brent near $95 per barrel and WTI around $91, but stocks and crude moved higher together in a reversal of the dynamic that had pressured markets the prior two sessions.

On the data front, ADP's private payroll report came in at just 38,000 jobs added in August, well below the 47,000 economists expected, setting a slightly cautious tone ahead of Friday's official jobs report. Strait of Hormuz traffic remains a point of confusion, with ship-tracking firm Kpler reporting just five ships crossed on Monday, while Energy Secretary Chris Wright told CNBC that over 17 million barrels passed through — calling it a record since the conflict began. Goldman Sachs chief global equity strategist Peter Oppenheimer also weighed in on the market outlook, telling Yahoo Finance that investors should expect mid- to high-single-digit returns over the next 12 months — solid, but well below the double-digit gains of the past year. After the bell, Broadcom and Snowflake both reported earnings, while Palo Alto Networks shares fell roughly 10% following its own Tuesday report, even as Deutsche Bank reiterated a Buy rating and praised the company's acquisition strategy as an "M&Asterclass."

SPY Performance
SPY opened at $762.45 and spent most of the session grinding higher in a measured, controlled fashion — nothing explosive, but steady enough to suggest buyers were willing to step in and defend the prior day's weakness. The high of $766.43 came later in the session as price continued to build on its early gains, and the low of $761.73 held right near the open, which is a constructive sign. That kind of tight floor beneath the open tells you sellers didn't get any real traction, and the close of $765.20 landed comfortably in the upper half of the day's range. That's a much healthier look than what the prior session left behind.

SPY finished up 0.45% on the day, which isn't a barnburner of a rally, but it's a meaningful step in the right direction after the selling pressure that had been quietly building. Volume came in at 23.99 million shares, below average and notably lighter than the prior session — so while the bounce is encouraging, it didn't arrive with the kind of conviction you'd want to see from a true reversal. The more telling data point was the VIX dropping 6.43% to 15.29, unwinding a meaningful chunk of the fear that had spiked into the market the day before. That combination of higher prices and a fading fear gauge is exactly what the bulls needed — but with participation still running thin, this market needs to see volume show up before anyone can confidently call the pullback finished.

Major Indices Performance
The Russell 2000 was the standout performer on the day, surging 1.31% and flipping the script on its recent run of underperformance. Small-caps finally caught a bid, and the move had some real conviction behind it — this is a group that's been battered by the rate environment, so any session where they lead the tape is worth noting. The risk-on tone that developed through the day gave smaller companies room to breathe, and traders who've been waiting for signs of life in the Russell got exactly that.

The Dow edged out the Nasdaq for second place, adding 0.56% and drawing support from its blue-chip heavyweights in a session where steadier names found some favor. The Dow's composition tends to reward it when broader sentiment improves without getting too speculative, and today fit that profile reasonably well. It wasn't a blowout move, but consistent buying throughout the session kept the index in positive territory without much drama.

The Nasdaq matched the S&P 500's gain at 0.45%, rounding out a broadly constructive day for equities even if tech wasn't the engine driving things forward. Growth stocks participated, but this wasn't a Nasdaq-led rally — the index benefited more from the rising tide than from any concentrated surge in mega-cap tech. With the VIX dropping 6.43% to close at 15.29, the fear premium came out of the market in a meaningful way, and that cooling of volatility helped keep all three indices pointed in the right direction heading into the close.

Notable Stock Movements
NVIDIA stepped into the spotlight as the standout performer among the Magnificent Seven today, surging 3.21% to lead what turned into a mostly green session for the group. After the prior day's broad-based selling, that kind of move from NVIDIA carries real weight — it signals that institutional money is willing to step back into the highest-beta AI names when the broader tape stabilizes. NVIDIA has a way of setting the tone for the group, and today it did exactly that.

The wider Magnificent Seven picture flipped convincingly to the green side, which aligns with the more constructive tone across the major indices. The two exceptions were Apple and Microsoft, with Microsoft leading the laggards to the downside at -0.84%. It's a notable reversal from the prior session, where only two names could hold the green — today only two names couldn't. That kind of near-unanimous participation from the mega-caps is a meaningful shift in character, even if one session doesn't make a trend.

The overall read from the Magnificent Seven is decidedly more positive, and it fits the tape. Five out of seven names pushing higher suggests the risk-off mood that dominated recently is at least taking a breather. With the VIX dropping 6.43% to 15.29, fear is receding with some conviction, and that kind of volatility relief tends to bring institutional buyers back off the sidelines. When they show up and the dominant mega-cap names respond, it reinforces the cautious optimism that helped push the Russell 2000 up 1.31% — the broadest sign of improving sentiment on the day.

Commodity and Cryptocurrency Updates
Crude oil isn't letting up, adding another 0.64% today to settle at $90.80. Black gold continues to defy gravity well above $70, and there's still no meaningful sign of a cooldown. Geopolitical tensions and tight supply conditions remain in the driver's seat, and the persistence of crude at these elevated levels keeps the inflation conversation very much alive. The longer energy prices stay parked up here, the more complicated the Fed's calculus becomes — this is exactly the kind of stubborn inflationary input that keeps rate cut talk on the back burner.

Gold bounced back in a big way today, climbing 1.96% to close at $4,433. After yesterday's disappointing pullback, buyers stepped in with conviction and reclaimed lost ground in a hurry. The underlying foundation of central bank demand and macro uncertainty hasn't changed, and this rebound confirms that dips in gold continue to attract serious interest. The bullish narrative is very much intact, and today's move suggests sellers aren't in control of this market just yet.

Bitcoin barely moved today, closing up just 0.06% and settling below $77,450. After weeks of violent swings in both directions, the near-flatline session almost feels unusual — but it's not necessarily a sign of strength. Crypto bulls need to see follow-through buying with some real conviction before getting excited, and a 0.06% gain doesn't qualify. Patience continues to be the right posture here until Bitcoin can string together consecutive green sessions that actually mean something.

Treasury Yield Information
The 10-year Treasury yield went absolutely nowhere today, closing flat at 4.800% — the exact same level that rattled markets in the prior session. A 0.00% move might sound uneventful, but in this context, it's anything but. Yields didn't retreat, which means the market got zero relief from the pressure this level creates. Every day the 10-year holds at 4.800% is another day equity valuations are being squeezed by an elevated discount rate, and today's modest green across the major indices happened in spite of that headwind, not because it went away.

The fact that equities managed gains while yields refused to pull back is worth noting, but it doesn't change the math. At 4.800%, the framework is still fully activated. This is the zone where selling historically accelerates, and while today showed some resilience, that resilience needs to be tested against continued yield pressure before drawing any bullish conclusions. The 5% level — where this framework signals real trouble — remains just 20 basis points away, and yields haven't given any indication they're ready to move meaningfully lower.

The 5.2% threshold that historically precedes a 20%-plus correction sits 40 basis points out, but the runway feels shorter than the math suggests when yields are already camped at 4.800% with no sign of backing off. What to watch next is simple: any daily close above 4.800% reignites the momentum toward 5%, while a confirmed pullback below 4.750% would be the first real signal that yield pressure is easing. Until one of those happens, the market is walking a tightrope with yields sitting squarely in the danger zone.

Previous Day’s Forecast Analysis
Wednesday's forecast called for SPY to trade within a projected range of $763 on the downside and $772 as the maximum upside target, a nine-point consolidation window that the model flagged as choppy and directionless rather than trending. With Tuesday's close at $761.72 sitting below that projected floor heading into the session, the near-term bias was explicitly bearish, putting the entire burden on buyers to first reclaim $763 before any bullish argument could gain traction.

The key level to watch on the long side was $763, the range floor and the first gate bulls had to clear just to get price back into the expected zone. From there, $766 was identified as the first meaningful resistance where sellers were likely to reassert themselves, followed by $768 as the next overhead hurdle, with $770 and $772 capping the upper end of the model's projected upside. On the downside, $759.48 was the critical support level — a clean break below it with expanding selling pressure was the trigger for short entries, with primary targets at $756-$757 and a secondary target of $753-$754 if momentum built. Stops on shorts were placed above $763, and stops on longs belonged below $759.48.

The recommended trading strategy leaned cautious, calling for position sizing pulled back to the 55-65% range with stop-losses kept tight in the 0.75-1.0% band from entry. The preferred long setup was a constructive pullback and hold in the $762-$763 zone, with an initial profit target of $768 and a stretch target of $771-$773 on strong volume expansion. The strategy warned against adding aggressively to longs until price cleared $765 with real conviction, noting that a low-conviction grind higher in a rising VIX environment was a headfake until proven otherwise. Discipline on exits was emphasized equally with discipline at entry.

Market Performance vs. Forecast
Wednesday's session validated the core directional framework while delivering a modest bullish resolution that the prior forecast had identified as a real possibility — just not the base case. The model's projected range of $763 to $772 captured Wednesday's actual trading almost perfectly, with SPY opening at $762.45, briefly dipping to $761.73 before immediately reversing, and closing at $765.20. The low of $761.73 essentially matched Tuesday's close and held just above the stop level for longs identified at $759.48 — meaning the downside risk management framework was never seriously threatened. That's the model doing exactly what it's designed to do: defining the field of play so traders know in advance where they stand.

What the model got right was the identification of $763 as the critical reclaim level and the preferred long entry zone of $762-$763 as the area where buyers needed to show their hand. Wednesday's session opened directly into that zone, tested it briefly at the low, and then built a constructive move higher through the session — precisely the scenario the long entry framework was constructed around. The initial profit target of $768 was not reached, with price topping out at $766.43, but the directional bias proved correct and the $763 reclaim played out almost to the tick. The VIX confirmed the bullish lean, dropping 6.43% to close at 15.29, unwinding a portion of the prior session's fear-gauge expansion and signaling that the options market's elevated risk pricing was beginning to normalize. The prior forecast noted that Call dominance in the options market would matter once buyers proved they belonged in the projected range — and Wednesday's price action delivered exactly that proof. Risk management protocols with stops below $759.48 were never engaged, and traders working the long side from the $762-$763 zone had a well-defined, low-risk entry that the model's level structure identified in advance. The framework continues to provide actionable precision, and Wednesday's constructive recovery reinforces that disciplined level identification navigates shifting tape conditions with consistency.

Premarket Analysis Summary
The premarket analysis posted at market open set SPY's projected range for Wednesday between $755 on the downside and $768 as max upside, with the defining gate level sitting at $762 — the line buyers needed to reclaim before any real recovery attempt could gain traction. The bias heading into the session was bearish, with spot sitting at $761.21 in a put-dominated tape extending a third straight session of selling pressure to the lowest levels of the pullback. Upside targets were layered at $763, $764, $765, and $768, with $765 flagged as the heaviest overhead concentration and the level bulls truly needed to capture. On the downside, $760 was the first line of defense directly beneath spot, $759 the most critical battle level where a clean break could get ugly fast, $757 the point of last hope holding the structure together, and $755 the bottom of the expected move. The expected move was six points wide, keeping the ranges meaningful after three sessions of steady directional pressure.

The actual session flipped the script entirely. SPY opened at $762.45, reclaiming the $762 gate level on the open and immediately shifting the burden back to sellers. Price never threatened the downside cluster — the $760 and $759 levels the analysis flagged as the first clean break that would decide the session went completely untested. Instead, buyers pushed straight through $763, $764, and $765 in sequence, eventually tagging a high of $766.43 before settling at $765.20, a gain of 0.45%. The upside target zone was hit with conviction, and the VIX dropping 6.43% to 15.29 confirmed the volatility unwind that buyers needed to see. After three sessions of pressure, Wednesday delivered a clean reversal off the lows.

Validation of the Analysis
Today's session validated the premarket framework beautifully, as SPY opened above the critical 762 gate and immediately signaled that buyers were stepping up to challenge the three-session slide. The premarket identified 762 as the defining level — the first thing bulls needed to reclaim to slow the downside momentum — and the open at $762.45 delivered exactly that, clearing that threshold and putting the burden back on sellers from the first tick. That was the tell. Traders watching for a reclaim of 762 as the trigger for upside participation had their entry handed to them at the open, with the analysis having mapped out exactly what a bullish resolution would look like.

From there, the upside targets laid out in the premarket came into play with impressive precision. The analysis flagged 763 as the first target, 764 as the next decision point, and 765 as the heaviest overhead concentration — the level where price should want to stall and where bulls really needed to push through. SPY's high of $766.43 cleared 765 cleanly and pressed into the zone between 765 and the 768 expected move cap, confirming that once buyers reclaimed 762 and took out each target in sequence, the move had real legs behind it. The close at $765.20 settled right at the heaviest overhead concentration the premarket identified, a textbook landing spot after a momentum recovery off a multi-session low. The VIX's drop of 6.43% to 15.29 aligned perfectly with the analysis's implication that a buyers' reclaim of 762 would ease volatility pressure — and that is precisely what unfolded. Traders who trusted the framework and faded the three-day slide above 762 had a clear, well-structured trade with defined targets from entry all the way through the close.

Looking Ahead
With the economic calendar coming up empty for Thursday, traders will be left to read the tape without any high-impact data releases to anchor sentiment. No GDP prints, no jobless claims, no Fed speak on the official schedule — just pure price discovery heading into the back half of the holiday-shortened week. That kind of quiet can cut both ways: it gives the bulls room to extend any momentum built earlier in the week, but it also removes the kind of hard catalyst that tends to bring sidelined money off the bench.

Without a scheduled data driver, the focus shifts entirely to technicals, market internals, and how institutional players choose to position ahead of Friday's close. Any overnight developments in overseas markets or unexpected headline risk could punch above its weight in a low-catalyst environment, so traders should stay alert even if the calendar looks sleepy. Thursday becomes a session about confirmation — whether the price action that developed earlier this week holds up under its own weight or starts to fade. Watch breadth and volume carefully, because in the absence of economic news, those internals will be the clearest signal of where conviction actually sits.

Market Sentiment and Key Levels
The directional bias today leans cautiously bullish, but calling this a full bull takeover would be getting ahead of yourself. SPY gained 0.45% on below-average volume of 23.99M shares, which means the move higher was constructive but lacked the kind of institutional conviction that turns a one-day bounce into a sustained trend. The VIX dropping 6.43% to 15.29 is the most encouraging signal of the session — that's a meaningful pullback in fear, suggesting the hedging pressure that had been building is starting to unwind. Broad participation added credibility to the advance, with the Russell 2000 outperforming at 1.31%, the Dow gaining 0.56%, and the Nasdaq matching SPY at 0.45%. When small caps lead, it typically signals genuine risk appetite returning rather than just defensive rotation.

Key resistance sits at $766.43, today's intraday high. A clean break above that level on rising volume would be a meaningful development, potentially opening the door to a more sustained push higher and giving bulls the momentum they need to shift the narrative. On the downside, $761.73 is the immediate support level to watch — that's where buyers held firm today, and a break below it on convincing volume would quickly flip this bullish lean back to neutral or worse. Gold surging 1.96% to $4,433 and Bitcoin holding close to unchanged add some nuance here — gold's strength could reflect lingering macro uncertainty rather than pure risk-on appetite, so it's worth monitoring. The 10-year yield holding flat at 4.800% remains an unresolved overhang for equities, and oil ticking up 0.64% to $90.80 keeps inflationary concerns quietly simmering in the background. Until SPY can push decisively through resistance with volume to back it up, bulls should stay cautiously optimistic rather than aggressively positioned.

Expected Price Action
Thursday'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 keeps this in consolidation territory, meaning participants should be prepared for choppy, back-and-forth price action rather than a clean directional trend. Wednesday's close at $765.20 sits comfortably inside the projected range, which is a constructive sign — but with $765 identified as the heaviest overhead concentration, price is essentially parked right at resistance heading into Thursday's open, leaving the near-term bias neutral to slightly bullish with conditions attached.

The defining level to watch on Thursday is $765, the point where sellers are most likely to show up and where bulls need to push through convincingly to keep momentum alive. A clean break and hold above $765 opens the door toward $768, the top of the expected move and the max upside the model projects for the session. On the downside, $762 is the first gate that needs to hold — losing it cleanly brings $760 into play immediately, and $760 is thin ice. Below $760 sits $759, the most consequential support level of the session and where the heaviest battle is likely to be fought. A decisive break of $759 could accelerate selling in a hurry, with $757 as the last line of defense before $755 becomes the target at the bottom of the projected range. The VIX's sharp decline of 6.43% to 15.29 signals the options market is pricing out fear for now, which supports the idea that Thursday could see calmer, more range-bound conditions — but the burden on buyers is to prove they can clear $765 and hold it, or the tape risks giving back Wednesday's gains in a hurry.

Trading Strategy
The VIX dropping 6.43% to 15.29 is a meaningful shift in sentiment — the options market is actively unwinding fear premium, not just drifting lower. At 15.29, we're in comfortably calm territory, and that kind of vol compression on a quiet-volume day tells you participants aren't hedging aggressively. That's a generally constructive backdrop, but the below-average activity behind today's gain is worth respecting. Low-conviction rallies in a low-VIX environment can extend further than expected, but they can also reverse fast when vol starts creeping back. Position sizing can be nudged up slightly to the 65-75% range given the cooler vol reading, but don't get sloppy — keep stop-losses in the 0.75-1.0% band from entry. The VIX at 15.29 gives bulls the benefit of the doubt, but it's not a green light to oversize.

In a rising market scenario, the bulls have already shown their hand with a positive close at $765.20, and the follow-through play is a hold and grind above $765-$766. The preferred long entry on any intraday dip is a pullback and hold in the $762-$763 zone, which aligns with the lower end of today's range and represents a natural base for buyers to defend. The initial profit target is $769-$770, with a stretch target of $773-$775 if volume picks up and confirms the breakout. Stops on longs belong below $760 to give the trade room while keeping risk well-defined. Don't chase strength above $767 on thin volume — wait for a clean consolidation and retest before adding.

In a falling market scenario, $761.73 is the key structural level to respect — that's today's low, and a clean break below it on expanding selling pressure is your trigger for short exposure. The primary profit target on a breakdown is $758-$759, with a secondary target of $755-$756 if sellers build momentum. Stops on shorts belong above $765 to protect against a snap reversal back through today's close. If the market opens soft and immediately undercuts $761.73 without putting up a fight, treat that as a high-conviction short entry with measured size. A VIX at 15.29 means vol-driven acceleration is less likely than in recent sessions, so don't expect waterfall selling — cover into support levels systematically and stay disciplined with exits.

Model’s Projected Range
SPY's projected maximum range for Thursday is $759 to $770, with the Call side dominating in an expanding band that suggests trending price action with intermittent chop. Thursday brings no economic news due out so the market will trade on technicals. Wednesday's session saw SPY open at $762.45, dip to a low of $761.73, push to a high of $766.43, and close at $765.20, up 0.45% on the day in a measured but constructive session that held its gains into the close despite volume coming in lower than average. SPY is trading near our model's first support at $765, and the geopolitical backdrop remains a factor as ongoing trade policy uncertainty continues to keep institutional players cautious on extended moves. On Thursday, if price can clear our model's first resistance at $770 it targets $771 next, while a break of first support at $765 opens the door toward $761, and if that level gives way there is little to keep price from falling toward $760. 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 $770, $771, $775, while support rests at $765, $761, $760, $759. We favor buying dips at $765 given SPY closed right at that level with the Call side in control of the range. Bitcoin was essentially flat, closing just below $77,450 with a mere 0.06% move, while MAG stocks posted a mostly green day led by NVIDIA surging up to 3.21% — the exception being Microsoft which dragged low by as much as -0.84%, making it a broadly constructive session for tech leadership even with that one notable soft spot. The VIX closed at 15.29, down 6.43%, suggesting a significant reduction in fear as bulls maintained control through the close and options markets priced out near-term downside risk. SPY closed in the upper half of its trend channel, with structural support near $761 providing a key line in the sand should the market see any early Thursday weakness.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended in a Bullish Trending Market State with SPY closing at $765.20. Since SPY closed inside the MSI range, support at $764.47 remains support and resistance at $766.2 remains resistance heading into Thursday. Extended targets were not printing at the close, though they were active during the AM session printing above, signaling upside momentum was present during the strongest part of the day. The MSI rescaled a bit lower overnight but it was not a significant move. What followed was a session that played out almost exactly as forecasted — a second test of MSI support held, SPY reversed hard off that level in premarket, and by the open price was already testing MSI resistance. The MSI then rescaled higher with extended targets printing above during the AM session, confirming the bullish momentum and triggering clean long setups. Once the AM session faded, the afternoon session turned sideways within the moderate MSI range and without extended targets SPY moved in a very tight range through the close. The moderate $1.73 spread gives price a defined but not overly wide channel to work within, and the Bullish Trending state keeps bulls in control heading into Thursday. The MSI is forecasting a slow grind higher for Thursday, though without extended targets at the close the move may be modest and is likely to find resistance at key levels above. MSI support is $764.47 with resistance at $766.2.
Key Levels and Market Movements:
Wednesday we stated, "A second test of MSI support at $759.5 has a reasonable chance of holding — it is the third test where confidence fades and the risk of a deeper move increases," and added, "Bulls want to see overnight price stabilize and push back through $763.39, reclaiming that level as support and shifting momentum toward the upper end of the range," while also noting, "Failed breakouts and failed breakdowns continue to offer the highest-probability setups." Wednesday delivered on the bullish setup in convincing fashion as SPY reversed hard off MSI support in premarket, and by the open it was already testing MSI resistance at what would become $766.2 after the MSI rescaled higher to confirm the bullish shift. The session opened at $762.45 and quickly pressed higher as the MSI transitioned from a Bearish or Ranging premarket state into a clean Bullish Trending state around the open, with both MSI lines locking in $764.47 as support and $766.2 as resistance. The preferred setup in a Bullish Trending state is buying MSI support when price approaches from below, and that is exactly what the framework offered early in the session. The first long setup triggered as price confirmed the breakout through MSI resistance after coming from below — since price came from below rather than above, we were looking for the breakout and MSI rescale higher to go long rather than fading resistance. That first trade easily hit its target. A second rescale higher with extended targets printing above offered another long entry that also found its target with ease, pushing SPY toward the session high of $766.43. A third potential setup emerged as SPY pulled back to MSI support, though without price approaching from below the MSI the probability edge was lower and the afternoon session faded into a tight sideways grind without extended targets to sustain momentum. SPY settled at $765.20, well off the lows and firmly inside the Bullish Trending range. At minimum it was a two-for-two session for traders following the framework. 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. The MSI continues to prove its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
Thursday 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 given that extended targets were not printing at the close and any advance is likely to find resistance at key levels above. The moderate Bullish Trending MSI keeps bulls in control, and buying dips to MSI support at $764.47 remains the highest-probability approach for Thursday. That said, the MSI may test that support level early before continuing higher, and like Wednesday that first test is likely to hold. Be mindful that multiple tests of $764.47 are less likely to hold and if the MSI rescales to a Ranging state that is not a state we favor trading. Patience and MSI confirmation matter most on a day like this.
Bulls want to see overnight price hold above $764.47 and push toward $766.2 and ultimately through it. If the MSI rescales higher and extended targets begin printing above, that would signal a more meaningful continuation is underway and buying any dip to MSI support would be the preferred approach targeting new highs. Bears want to see $764.47 fail to contain selling pressure and press price back toward lower levels. If the MSI rescales to a Ranging or Bearish Trending state with extended targets printing below on Thursday, the bullish case fades quickly and caution is warranted. Given the current setup, buying any pullback to $764.47 support is the preferred approach, targeting $766.2 resistance and beyond if extended targets begin printing above. A failed breakdown at $764.47 — where price briefly dips below but quickly reclaims it — is also worth watching as a high-probability long setup back toward resistance. Traders should let the MSI confirm direction before committing to either side and avoid forcing setups in the absence of extended targets or a clear rescale signal.
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 $806 and higher strike Calls while buying $769 Calls, indicating the Dealers' desire to participate in any breakout above $769 on Thursday. The ceiling for Thursday appears to be $775. To the downside, Dealers are buying $765 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. Dealers are buying OTM Calls to position for a potential breakout, though this does not reflect deep conviction that higher prices are likely. That said, they have not increased their hedges, suggesting more of a wait and see approach heading into Thursday. Below $761 is bearish and above $762 is bullish with everything in between being chop and trap filled. Should SPY fail to hold $760, there is a wall of support that will slow any decline, while above $768 there is little to keep SPY from reaching $770. Dealer positioning is unchanged at bullish.
Looking Ahead to Next Friday:
Dealers are selling SPY $771 to $810 and higher strike Calls while buying $766 to $710 Calls, indicating the Dealers' desire to participate in any rally into Friday. The ceiling for the week appears to be $778. To the downside, Dealers are buying $760 to $655 and lower strike Puts in a 3:1 ratio to the Calls they're selling, displaying moderate concern that prices could move lower. Dealers are also selling Puts at $765 to $763 and $756, and Dealers do not sell ATM Puts unless they believe there is a floor in the market at $756. This positioning is strongly bullish, even with the options market remaining Put dominated into Friday, and suggests Dealers believe the market is likely to rally into next Friday, perhaps as a result of the jobs report. We remain bullish above $766 but below $765 we are bearish with the zone in between being nothing but chop and full of traps. For the week Dealer positioning is unchanged at neutral/slightly 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 $765.20 and VIX dropping 6.43% to 15.29, the bias shifts cautiously bullish. Favor longs on any dips toward $762, with stops below $761.73. Resistance sits near $766.43 — a clean break above that level opens the door for further upside.

Keep position sizes reasonable with the 10-year yield still pinned at 4.800, a level where any uptick could quickly flip the tone. Always 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!