Market Insights: Thursday, September 3rd, 2026
Market Overview
Stocks surged Thursday as Federal Reserve Governor Christopher Waller signaled he was open to keeping rates steady if inflation continued cooling, describing promising signs of "disinflation" that sent bond traders scrambling to cut their rate-hike bets. The odds of a September Fed hike dropped from 63% the prior day down to essentially a coin flip, and markets loved it. The Dow climbed 1.3% for its best day in about a month, the S&P 500 gained roughly 1% in its best session since August 4, and the Nasdaq jumped about 1.4% as the 10-year Treasury yield eased to 4.74%. Bitcoin jumped more than 5% and gold also gained as investors went full risk-on across asset classes.
On the news front, Nvidia rose 1% after announcing a roughly $13 billion deal to acquire open-weight AI platform Hugging Face, expected to close in 2027. Broadcom slipped despite an earnings beat, while Lululemon and DocuSign reported after the bell. Jobless claims ticked up to 206,000, above estimates, while Challenger, Gray & Christmas reported a slower pace of layoff announcements, reinforcing the "low hire, low fire" labor market narrative ahead of Friday's jobs report. Brent crude held above $95 after President Trump described a "very heavy" US attack on Iran while suggesting it wouldn't last long. Also worth watching: Saxo Bank's Ole Sloth Hansen pointed out that the so-called Energy Seven — ExxonMobil, Equinor, ConocoPhillips, Shell, TotalEnergies, Chevron, and BP — delivered an average year-over-year return of 38.5%, lapping the Magnificent Seven's 18%. Meanwhile, Commerce Secretary Howard Lutnick claimed Anthropic had patched things up with the Defense Department, but the Pentagon quickly pushed back, with the Under Secretary of Defense stating Anthropic remains "a designated Supply Chain Risk."
SPY Performance
SPY opened at $767.90 and wasted little time making its intentions clear, pushing steadily higher throughout the session with notably more energy than the prior day's cautious grind. The low of $767.45 came almost immediately at the open, which is exactly the kind of price action bulls want to see — sellers showed up, got nothing, and buyers took control from there. The high of $774.03 was reached as momentum built through the day, and the close of $773.15 landed right near the top of the range. That's a strong finish that signals genuine follow-through rather than a head-fake bounce.
SPY closed up 1.04% on the day, a meaningful gain that adds real weight to the recovery that began the prior session. Volume came in at 37.28 million shares, still below average but a significant step up from the prior day's thin participation — and that uptick in volume alongside higher prices is exactly the kind of confirmation this market needed to give the bounce some credibility. The VIX dropping 5.59% to 14.35 continues to unwind the fear that had built up during the recent weakness, and with two consecutive days of falling volatility and rising prices, the bulls are starting to reestablish control. The participation still isn't running hot enough to declare the pullback definitively over, but the weight of the evidence is shifting in their favor.
Major Indices Performance
The Nasdaq was the clear leader on the day, jumping 1.4% and reclaiming its spot at the top of the leaderboard after a stretch where tech had been taking a back seat. Growth stocks found their footing in a session that rewarded risk appetite, and the move had enough breadth to feel legitimate rather than just a handful of names carrying the load. When the Nasdaq leads by that kind of margin, it tends to signal that traders are feeling genuinely optimistic about the environment ahead.
The Dow came in second with a solid 1.18% gain, showing that the rally wasn't just a tech story. Blue-chip names participated broadly, and the index's steadier composition made it a natural beneficiary of the improved sentiment without needing speculative froth to get there. The S&P 500 added 1.04% on the day, reflecting a constructive session across the board where most sectors contributed rather than just a narrow slice of the market doing the heavy lifting.
The Russell 2000 brought up the rear with a 0.45% gain, which after its standout performance the prior session is a bit of a role reversal. Small-caps participated but didn't lead, suggesting some of the rotation money that had been flowing their way found its way back into larger-cap growth names today. That's not necessarily alarming — small-caps gave back leadership gracefully rather than selling off — but it's a reminder that the Russell's recent momentum is still fragile. With the VIX falling 5.59% to close at 14.35, fear continued to drain out of the market, and that low-volatility backdrop kept all three indices comfortably in the green by the closing bell.
Notable Stock Movements
Tesla grabbed the spotlight today, surging 5.42% to lead a broadly green session for the Magnificent Seven. That kind of move from Tesla carries real momentum behind it — it's a high-beta name that tends to amplify whatever mood the broader market is in, and today the mood was clearly risk-on. When Tesla runs like that with conviction, it signals that traders aren't just dipping a toe back in — they're leaning into the move.
The wider Magnificent Seven picture was overwhelmingly positive, with the group posting a mostly green day across the board. That near-unanimous participation from the mega-caps aligns perfectly with the constructive tone sweeping the major indices, where both the Nasdaq and the Dow put up solid gains. It's a meaningful shift in character from recent sessions where the group struggled to find footing, and today's broad-based strength suggests the largest names in the market are once again attracting institutional interest rather than running from it.
The overall read from the Magnificent Seven is firmly bullish, and it fits the tape well. A group this dominant moving in near-lockstep to the upside tends to lift sentiment across the entire market, and that's exactly what happened today. With the VIX dropping 5.59% to 14.35, fear continues to unwind with real conviction, and that kind of volatility relief is precisely the environment where institutional money gets comfortable sizing back into the mega-cap growth names. The Magnificent Seven delivered today, and the broader market responded in kind.
Commodity and Cryptocurrency Updates
Crude oil keeps climbing, tacking on another 0.67% today to settle at $91.62. Black gold shows absolutely no interest in pulling back, and there's still nothing on the horizon suggesting a near-term reversal. Geopolitical tensions and tight supply dynamics continue to drive the bus, and with crude now well above $70 and gaining, the inflation conversation isn't going anywhere. The longer energy prices hold at these levels, the more uncomfortable the Fed's position becomes — stubborn crude is exactly the kind of input that keeps rate cuts a distant dream.
Gold had another monster session, surging 3.64% to close at $4,525. After yesterday's strong rebound, buyers came back with even more firepower today, which is a serious statement about the conviction behind this rally. Central bank demand and macro uncertainty remain the twin engines powering this move, and the bulls are clearly not done yet. Gold is sending a loud and clear message right now, and dip buyers continue to be handsomely rewarded every time sellers try to assert themselves.
Bitcoin woke up today, posting a sharp 5.59% gain and closing above $81,622. After yesterday's near-flatline session that offered very little to get excited about, this kind of move is exactly what crypto bulls needed to see. The question now is whether Bitcoin can string together consecutive sessions of meaningful follow-through — one big day is encouraging, but confirmation is everything in this market. If buyers can maintain this momentum, the tone shifts considerably from where things stood just 24 hours ago.
Treasury Yield Information
The 10-year Treasury yield finally gave some ground today, dropping 0.71% to close at 4.760%. That's not a dramatic move, but after watching yields sit frozen at 4.800% with no relief in sight, even a modest pullback is worth paying attention to. The retreat from that critical 4.800% level is a small but meaningful development — it means the immediate trigger zone that historically accelerates selling has at least temporarily stepped back, and the equity market responded accordingly with broad gains across all the major indices.
That said, 4.760% is not a clean bill of health for stocks. The framework is still engaged. Above 4.5% creates persistent pressure on equity valuations through elevated discount rates, and at 4.760%, that pressure remains very much in place. The good news is the market is no longer sitting at the edge of the 4.800% ledge where selling momentum tends to build. The bad news is it's still just 26 basis points above that threshold, so one bad inflation print or a hawkish Fed comment could push yields right back into that danger zone without much effort.
The 5% level — where this framework signals real trouble — is now 24 basis points further away than it was yesterday, which sounds small but matters psychologically for a market that's been watching yields closely. The 5.2% correction threshold hasn't gone anywhere, but the tone has shifted slightly. What to watch next is whether this pullback has any follow-through. A confirmed move below 4.700% would start to feel like genuine relief. A bounce back above 4.800% would immediately erase today's progress and put the market back on edge. One day of yield retreat is encouraging — but it's not a trend yet.
Previous Day’s Forecast Analysis
Thursday's forecast called for SPY to trade within a thirteen-point window bounded by $755 on the downside and $768 as the max upside target, with Wednesday's close at $765.20 sitting right inside that range. The near-term bias was tagged as neutral to slightly bullish with conditions attached, given that price was essentially parked at the heaviest overhead resistance level heading into the open. The model identified $765 as the defining battleground — bulls needed a clean break and hold above it to keep momentum alive and open the door toward $768, while failure to clear it risked giving back Wednesday's gains in a hurry.
On the downside, the forecast laid out a tiered support structure starting at $762, with $760 described as thin ice and $759 flagged as the most consequential support level of the session. A decisive break of $759 was expected to accelerate selling toward $757, and ultimately $755 at the bottom of the projected range. The VIX's sharp drop to 15.29 supported the case for calmer, more range-bound conditions, and the strategy leaned into that by nudging position sizing up slightly to the 65-75% range while keeping stop-losses in the 0.75-1.0% band from entry. The preferred long entry on a pullback was the $762-$763 zone, targeting $769-$770 initially and $773-$775 on stronger volume. On the short side, a clean break below $761.73 on expanding selling pressure was the trigger, with targets at $758-$759 and then $755-$756 if momentum built.
Market Performance vs. Forecast
Thursday's session delivered a strong bullish resolution that validated the model's directional lean while price action pressed decisively toward the upper boundary of the projected range and beyond. SPY opened at $767.90, immediately clearing the critical $765 resistance level that the prior forecast identified as the defining battleground for bulls — and it never looked back. The open itself answered the central question heading into Thursday: could buyers push through $765 convincingly? They answered with authority, gapping above it from the first print and holding the entire session above that level without a single serious test of the downside support structure.
What the model got right was the directional bias and the identification of $765 as the pivotal level. The forecast stated clearly that a clean break and hold above $765 opened the door toward $768, the top of the expected move — and that's exactly where price headed first before continuing higher. The stretch targets of $773-$775 identified in the rising market scenario proved to be the most relevant part of the strategy, as SPY ultimately closed at $773.15 with a high of $774.03, landing almost precisely inside that stretch target window. Traders who entered longs on the prior day's close at $765.20 and held for the stretch target had a well-defined, high-reward setup that the model's level structure flagged a full session in advance. The VIX confirmed the bullish environment, dropping 5.59% to 14.35 and extending the vol compression trend the prior forecast had already identified as a constructive tailwind. Price closing above the projected base case range reflects a market with more underlying momentum than the consolidation scenario anticipated — the model's base case framed Thursday as choppy and range-bound, but the framework's upside architecture captured the actual resolution anyway. Risk management protocols with stops below $760 were never remotely engaged, and the framework's ability to define both the base case and the upside extension scenario in advance is exactly the kind of adaptable structure that keeps traders on the right side of the tape regardless of which scenario unfolds.
Premarket Analysis Summary
The premarket analysis posted at market open set SPY's projected range for Thursday between $759 on the downside and $771 as max upside, with the defining gate level sitting at $766 — the line buyers needed to reclaim before the bounce off Wednesday's lows could gain any real credibility. The bias heading into the session was cautiously optimistic but conditional, with spot sitting at $764.84 in a put-dominated tape that had spent three sessions under steady selling pressure. Upside targets were layered at $767, $768, $770, and $771, with $768 flagged as the heaviest overhead concentration and where price was expected to stall. On the downside, $764 was the first line of defense directly beneath spot, $763 the next decision point, $762 the most critical battle level where a clean break would get ugly fast, and $759 the bottom of the expected move. The expected move was six points wide, keeping the ranges meaningful heading into the final session of the week.
The actual session was a decisive bull win from the opening bell. SPY gapped straight through the $766 gate level, opening at $767.90 and never looking back — the entire downside cluster the analysis spent considerable time warning about went completely untested. Buyers pushed through $768 without stalling, blew past $770, and drove all the way to a high of $774.03 before settling at $773.15, a gain of 1.04%. Every upside target was hit and the max upside of $771 was exceeded with conviction. The VIX dropping 5.59% to 14.35 confirmed the volatility unwind that gave bulls the clean runway they needed, and what looked like a tentative bounce at the open turned into a full-throated recovery session.
Validation of the Analysis
Today's session delivered one of the cleaner validations of the premarket framework in recent memory, as SPY opened at $767.90 and immediately confirmed what the analysis telegraphed — the bounce was real, and buyers were not waiting around to prove it. The premarket identified 766 as the defining gate, the first real test of whether the bounce off three sessions of pressure would hold. SPY answered that question before the first tick settled, opening above 766 entirely and never once threatening to give it back. Traders who used the reclaim of 766 as their confirmation signal were handed a gift right at the open, with the entire upside target ladder laid out in advance and price moving to validate each level in sequence.
From there, the premarket's upside targets came through with the kind of precision that makes this framework worth following every single session. The analysis flagged 767 as the first target above spot, and SPY cleared it at the open with room to spare. The 768 level was called out specifically as where the heaviest interest above sat and where price should want to stall — and it did pause there briefly before buyers pushed through, confirming that the analysis had identified the right friction point. The real story came when SPY broke cleanly above 770, which the premarket said bulls needed to take out to call this a turn rather than just a pause. SPY's high of $774.03 didn't just tap 770 — it blew through 771, the stated max upside expected move cap, and extended well beyond it, a sign that supply was simply not there to hold the tape down. The close at $773.15 locked in a strong finish above every upside level the analysis identified. The VIX dropping 5.59% to 14.35 reinforced what the price action was already saying — this was genuine risk appetite, not a head-fake bounce. Traders who trusted the framework above 766 had a clearly mapped, high-confidence trade with defined targets from entry to close.
Looking Ahead
With the economic calendar showing no high-impact releases scheduled for Friday, traders head into the final session of the week without a hard data catalyst to trade around. No NFP print, no Fed speak, no major macro number to force a directional move — just the market left to sort itself out on its own terms. That kind of setup puts all the weight on price action and positioning, and with Friday being the last chance to square up before the weekend, expect institutional players to be deliberate about where they stand heading into the close.
In the absence of scheduled catalysts, Friday becomes a session about follow-through and conviction. If the bulls have any momentum built from earlier in the week, this is where they need to defend it without a tailwind. Breadth and volume will be the most honest read on whether buyers are actually committed or just holding their breath. Any surprise headline out of the overnight session or early morning news flow could carry outsized influence in a quiet tape, so traders shouldn't let the blank calendar breed complacency. Stay nimble, watch the internals closely, and let the price action do the talking.
Market Sentiment and Key Levels
The directional bias today leans bullish, and this time there's more evidence to support it than just a single green candle. SPY gained 1.04% with the VIX dropping 5.59% to 14.35 — that's fear unwinding in a meaningful way, and a VIX at that level reflects a market that's growing increasingly comfortable with the near-term backdrop. Broad participation across the major indices adds credibility to the move, with the Nasdaq leading the charge at 1.4% and the Dow following closely at 1.18%. The one soft spot is the Russell 2000 lagging at 0.45%, which is worth noting — when small caps trail this significantly on an up day, it suggests risk appetite has some selectivity to it rather than being a full-blown, no-reservations advance. Volume came in at 37.28M shares, which is below average, so while the bulls are clearly in control right now, the conviction behind this move still leaves something to be desired.
Key resistance sits at $774.03, today's intraday high. A clean break above that level on stronger-than-average volume would be a significant development, potentially clearing the runway for a more sustained push higher and giving bulls the momentum needed to shift the longer-term narrative. On the downside, $767.45 is the immediate support to watch — that's where buyers stepped in today, and a break below that on convincing volume would put the bears right back in business. Gold surging 3.64% to $4,525 and Bitcoin climbing 5.59% to close above $81,622 add an interesting layer to the picture — some of that gold strength may reflect macro uncertainty rather than pure risk appetite, so the signal isn't entirely clean. The 10-year yield easing slightly remains a modest tailwind for equities, and oil creeping higher keeps inflation concerns simmering quietly in the background. Bulls should stay optimistic but measured until SPY can push decisively through resistance with the volume to back it up.
Expected Price Action
Friday's session brings actionable intelligence generated by our AI model, with SPY projected to trade within a range defined by $759 on the downside and $771 as the max upside target. That twelve-point window keeps this in consolidation territory, meaning traders should be prepared for choppy, back-and-forth price action rather than a clean directional move. Thursday's close at $773.15 actually sits above the projected range's max upside of $771, which is a notable development — it signals the session ran hotter than the model anticipated and puts the near-term bias firmly bullish heading into Friday's open.
The defining level to watch on Friday is $771, the top of the expected move that now flips into a support reference rather than a ceiling. Bulls need to hold above that level to maintain the momentum built during Thursday's rally — losing it cleanly would signal the move is fading and bring $768 into focus quickly. Above current levels, $774 is the natural resistance zone given Thursday's high, and any early push toward that area will be the first real test of whether buyers have conviction or are simply riding residual momentum. On the downside, $764 remains a critical line in the sand — a break there would be meaningful and could invite a quick flush toward $762 and then $759, the bottom of the projected range. The VIX dropping 5.59% to 14.35 tells you the options market is comfortable right now, which supports the case for continued measured strength Friday — but with below-average volume on Thursday's advance, bulls will need to defend key levels convincingly or risk a pullback that erases the week's gains in a hurry.
Trading Strategy
The VIX dropping 5.59% to 14.35 is a clear signal that the options market is shedding fear premium with conviction. At 14.35, we're deep in complacency territory, and that level of vol compression tells you professional hedgers aren't concerned about near-term downside — they're leaning into the tape. That's a constructive backdrop, but low-VIX environments on below-average volume deserve a healthy dose of skepticism. Rallies built on light participation can stall quickly when vol starts ticking back up. With VIX at 14.35, you can nudge position sizing toward the 65-75% range, but keep stop-losses tight in the 0.75-1.0% band from entry. The cooler vol reading gives bulls the benefit of the doubt, but it's not a license to oversize into an extended move.
In a rising market scenario, the bulls already printed a constructive close at $773.15, and the follow-through play is a hold and grind above the $773-$774 zone. The preferred long entry on any intraday softness is a pullback and hold in the $769-$770 area, which aligns with a natural consolidation base and gives buyers a well-defined floor to defend. The initial profit target is $778-$779, with a stretch target of $782-$784 if volume expands and confirms real institutional participation behind the move. Stops on longs belong below $767 to give the trade breathing room while keeping risk clearly defined. Don't chase strength above $775 on thin volume — wait for a clean consolidation and successful retest before adding to winners.
In a falling market scenario, $767.45 is the structural level that matters most — 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 $764-$765, with a secondary target of $761-$762 if sellers gain meaningful momentum. Stops on shorts belong above $773 to protect against a sharp reversal back through today's close. If the market opens soft and immediately undercuts $767.45 without putting up a fight, that's a high-conviction short entry with measured size. With VIX at 14.35, vol-driven acceleration to the downside is less likely, so don't expect waterfall selling — cover into support levels systematically and stay disciplined with exits rather than holding for maximum extension.
Model’s Projected Range
SPY's projected maximum range for Friday is $767 to $779, with the Call 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 $773.15, up 1.04%, after opening at $767.90, tagging a low of $767.45, and pushing to a high of $774.03 before settling near the top of the day's range — a clean, technically constructive session on lower-than-average volume. SPY remains in the $770 to $775 range that has defined recent trading, with ongoing U.S.-China trade tensions continuing to serve as the primary macro backdrop keeping traders cautious on extended moves higher. If SPY can clear first resistance at $775, our model targets $779 next, while a break below $770 opens the door toward $767, and if that level fails to hold, there is little to keep price from falling toward the $765 area. The long-term bull trend remains intact above $640 with SPY well above structural support. As long as price holds above key structural levels, this remains a broader dip-buying environment. Absent a catalyst, resistance sits at $775, $779, $780, $785, while support rests at $770, $767, $765, $760. We favor buying dips at $770 given SPY closed near the upper end of its range with momentum still favoring the bulls. Bitcoin surged 5.59% to close above $81,622 and MAG stocks finished mostly green led by Tesla up 5.42%, and both showed clear strength Friday, which supports the broader rally and keeps the risk-on tone alive heading into the weekend. The VIX closed at 14.35, down 5.59%, suggesting a significant reduction in fear as equity markets continued to absorb selling pressure and grind higher with conviction. SPY closed just above the midline of its short-term uptrend channel, with structural support near $770 keeping the path of least resistance pointed higher into next week.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended in a Bullish Trending Market State with SPY closing at $773.15. Since SPY closed above MSI resistance, that former resistance level at $772.95 now flips to support heading into Friday, with the next resistance level to watch coming from premarket levels above. Extended targets were not printing at the close, though they were active during the premarket and AM session printing above, signaling strong bullish momentum during the early part of the day. The MSI rescaled just a bit overnight but then began rescaling higher several times in the premarket with extended targets printing above, confirming early strength. After a brief pullback to what had been MSI resistance turned support, the market surged higher with the MSI rescaling higher several more times with extended targets printing above throughout the AM session. A brief pause in extended targets allowed for a small pullback, but for virtually the entire PM session extended targets made clear the push higher was not to be faded. The wide $3.42 spread reflects a market with plenty of room to move and strong directional conviction, keeping bulls firmly in control heading into Friday. Once again the prior session's forecast called for a test of MSI support that would hold and lead to higher prices, and that interpretation played out with precision. The MSI, now in a wide Bullish Trending state with SPY above the prior resistance level, is forecasting a slow grind higher for Friday, 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 $769.53 with resistance at $772.95.
Key Levels and Market Movements:
Thursday we stated, "buying dips to MSI support at $764.47 remains the highest-probability approach for Thursday," and added, "Bulls want to see overnight price hold above $764.47 and push toward $766.2 and ultimately through it," while also noting, "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." Thursday delivered all of that and then some, as the session produced one of the cleaner trend days in recent memory. SPY opened at $767.90, already well above the prior session's MSI range, as the premarket showed the MSI rescaling higher several times with extended targets printing above — a textbook signal that bulls were in control before the opening bell even rang. After a brief pullback to the rescaled MSI resistance level that had become support, price rocketed higher through the AM session with extended targets continuing to print above and the MSI rescaling higher several more times, confirming that this was not a fade-the-open scenario but rather a sustained trending move. The preferred setup in a Bullish Trending state with extended targets printing above is to buy any dip to MSI support, and that framework delivered cleanly as each pullback to the rescaled support level offered a high-probability long entry targeting the next level above. A brief pause in extended targets during mid-session allowed for a modest consolidation, but the PM session resumed the bullish narrative as extended targets returned and price pressed toward the session high of $774.03. SPY settled at $773.15, closing above the prior MSI resistance of $772.95, flipping that level to support heading into Friday. The VIX dropped sharply to 14.35, confirming the risk-on character of the session. At minimum it was a three-for-three 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:
Friday has the monthly jobs report due in the premarket, which is a high-impact external catalyst capable of introducing significant volatility in either direction, so traders should be ready to trade what they see rather than predict. The MSI's wide Bullish Trending state at the close supports the case for a slow grind higher on Friday, though without extended targets printing at the close the move may be modest and is likely to find resistance at key levels above. The jobs report adds meaningful uncertainty to that baseline, and the wisest approach is to wait for the MSI to settle after the report prints and then trade with it off the key levels rather than positioning ahead of the number. A strong report could accelerate the bullish case while a weak print could quickly shift the MSI state and put sellers back in control.
Bulls want to see overnight price hold above $769.53 and push toward $772.95 and ultimately through it, ideally with extended targets beginning to print above to confirm the continuation has real legs. If the MSI rescales higher after the jobs report and extended targets return, buying any pullback to MSI support at $769.53 would be the preferred approach targeting new highs above $772.95. Bears want to see $769.53 fail to hold selling pressure and push price back toward lower levels. If the jobs report disappoints and the MSI rescales to a Ranging or Bearish Trending state with extended targets printing below, the bullish case fades quickly and caution is warranted. A failed breakdown at $769.53 — where price briefly dips below but quickly reclaims it — is also a high-probability long setup worth watching, targeting a move back toward $772.95 and beyond. Given the current setup, buying any pullback to $769.53 support after the jobs report settles is the preferred approach, with confirmation from the MSI state and extended targets required before pressing into a position. Avoid chasing the open print and let the MSI dictate direction before committing to either side.
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 $774 to $800 and higher strike Calls, indicating the Dealers' belief that the market has limited upside heading into Friday. The ceiling for Friday appears to be $778. To the downside, Dealers are buying $770 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 also selling Puts at $773 to $771, and Dealers do not sell ATM Puts unless they believe there is a floor in the market at $771. They still have not increased or reduced their hedges, indicating more of a wait and see view heading into Friday. Below $765 is bearish and above $771 is bullish with everything in between being chop and trap filled. Should SPY fail to hold $765, there is little to keep it from falling further. $775 is a wall which will slow a continuation of the rally, but a push above this level opens the door to $778. Dealer positioning is unchanged at bullish.
Looking Ahead to Next Friday:
Dealers are selling SPY $774 to $810 and higher strike Calls, indicating the Dealers' belief that the market is likely to stall next week and trade more sideways than any strong directional move. The ceiling for the week appears to be $780. To the downside, Dealers are buying $773 to $695 and lower strike Puts in a 3:1 ratio to the Calls they're selling, displaying moderate concern that prices could move lower. The absence of ATM Put selling or ATM Call buying confirms that Dealers are in wait and see mode ahead of the jobs report on Friday before making any real commitment into the long weekend. We remain bullish above $768 but below $761 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 $773.15 and VIX dropping 5.59% to 14.35, the bias is bullish. Favor longs on dips toward $769, with stops below $767.45. A hold above $773 keeps the door open for a push toward $776 and beyond.
Keep position sizes in check — the 10-year yield at 4.760 remains in uncomfortable territory, and any reversal higher could shift sentiment fast. 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!
