Market Insights: Monday, September 8th, 2025

Market Overview

Stocks kicked off the week with moderate gains as investors looked ahead to key inflation reports that could determine the fate of the Federal Reserve's next move. The Nasdaq led the charge, rising 0.45% and closing at a record high thanks to strength in tech. The S&P 500 and Dow each climbed 0.2%, continuing the rebound from Friday’s soft jobs report. Markets remain squarely focused on the Producer Price Index (PPI) due Wednesday and the Consumer Price Index (CPI) on Thursday, data that could either reinforce or shake traders’ conviction about an upcoming rate cut.

Currently, most investors are betting on at least a 25 basis point cut next week, though rising chatter points to a surprise 50 basis point move, especially as recession concerns grow in the wake of weakening labor data. Revised job figures due Tuesday will also draw attention, adding another layer of scrutiny to a labor market already under pressure. Meanwhile, geopolitical risks continued to simmer, as President Trump’s trade tariffs faced legal pushback. Treasury Secretary Scott Bessent warned of possible government rebates if the Supreme Court invalidates many of those duties. In corporate news, Robinhood surged 15% on confirmation it will join the S&P 500, while gains in Nvidia and Broadcom helped lift tech sentiment and drive the Nasdaq to new highs.

SPY Performance

SPY climbed 0.25% to close at $648.85 after opening at $648.77 and trading in a tight range throughout the day. The ETF hit a high of $649.84 and a low of $647.23, with volume slightly below average at 57.75 million shares. The price action showed a clear effort to defend the $645 level, which once again acted as strong support. While SPY failed to make a meaningful move toward breakout territory, the close above the bias level indicates bulls still have the upper hand, even in a low-volatility, news-light session.

Major Indices Performance

The Nasdaq took the lead Monday, rising 0.45% to notch a new all-time closing high as tech names helped push the index higher. The Dow and S&P 500 both gained 0.2%, recovering some of Friday’s losses. The Russell 2000 added 0.21%, continuing to show relative strength. Overall, the market seemed to take a wait-and-see approach ahead of this week’s inflation data. Sector performance was mixed, with cyclicals catching a bid while defensive names were more subdued. With the Fed’s next rate move in focus, traders appear reluctant to take major positions until the CPI and PPI numbers are in.

Notable Stock Movements

It was a mixed day for the Magnificent Seven, with Nvidia and Broadcom helping lead the group higher while Alphabet, Apple, and Tesla lagged. Tesla was the worst performer, dropping 1.24% and continuing its recent choppy pattern following headlines about CEO compensation and delivery delays. Alphabet and Apple also closed in the red, though losses were modest. Meanwhile, Nvidia continued to benefit from strong AI-related sentiment, and Microsoft, Meta, and Amazon ended the day in positive territory. The rotation within this elite group reflects a cautious tone, with traders becoming more selective ahead of key macro events.

Commodity and Cryptocurrency Updates

Crude oil rose 0.89% to $62.42 but remained well below recent highs as it continues a slow march toward the $60 level that our model has long forecasted. Supply concerns have eased, and renewed focus on demand-side risks has pressured energy markets in recent sessions. Gold moved up 0.63% to settle at $3,676, buoyed by steady risk-off flows and anticipation of more dovish Fed commentary later this month. Bitcoin added 0.66% to close just above $112,000, continuing to grind higher in tandem with broader risk assets while still lacking a distinct narrative of its own.

Treasury Yield Information

Yields continued to slide Monday, with the 10-year Treasury yield falling 0.91% to 4.045%. The move reflects growing market confidence that the Fed will be forced to act sooner and more aggressively, especially if inflation comes in cooler than expected. With yields pulling back from the danger zone near 4.5%, a level that historically pressures equities, stocks have room to run. However, the market remains on edge. A spike above 4.8% would start triggering risk-off behavior, and a move above 5% could signal a correction of 20% or more.

Previous Day’s Forecast Analysis

Friday’s newsletter projected SPY would trade in a wide range between $639 and $652.25, anticipating a choppy session with key support levels at $645, $644, and $640, and resistance near $650 and $655. The model favored long trades above $644, while advising caution below that level. With Friday’s disappointing jobs report in the rearview, the forecast leaned cautiously bullish heading into Monday, noting the likelihood of sideways action ahead of inflation data later in the week. It also emphasized the importance of protecting gains and using smaller position sizes due to macroeconomic uncertainty.

Market Performance vs. Forecast

SPY’s performance on Monday closely matched the forecast. The ETF opened at $648.77 and traded within the projected range of $639 to $652.25, hitting a high of $649.84 and low of $647.23. Support at $645 held firm, and the price remained above the bias level of $648, validating the model’s outlook. Although SPY failed to test the upper resistance at $652.25 or $655, the session remained orderly, and those who followed the long-biased strategy above $644 likely captured modest gains. The subdued trading aligned with expectations for a consolidation day as markets await this week’s inflation data.

Premarket Analysis Summary

In Monday’s premarket analysis posted at 9:41 AM, SPY was trading at $648.57 with a bullish bias level set at $648. The model projected resistance at $651 and $655, with downside support at $648, $647, $646, and $644. The analysis expected bullish progress if the bias level held and suggested short trades only if the bias was lost and not quickly reclaimed. The tone was cautiously bullish, with the session expected to drift higher barring any unexpected negative catalysts.

Validation of the Analysis

Monday’s session validated the premarket analysis almost perfectly. SPY held above the bias level of $648 for most of the day, with early strength pushing toward the $650 zone, just shy of the $651 target. The low of $647.23 dipped below initial support but quickly reversed, underscoring the value of staying long above $644. No rapid breakdown occurred, and resistance levels capped upside movement as expected. Traders who followed the plan and stayed patient with long setups near support were rewarded with clean, manageable trades.

Looking Ahead

Tuesday brings no major economic news, giving markets another quiet day before the storm of inflation data mid-week. Traders will be positioning ahead of Wednesday’s PPI and Thursday’s CPI releases, both of which are expected to heavily influence the Fed’s next move. While the market currently prices in a rate cut, the size and timing of that cut remain up for debate. With Tuesday marking a gap between events, we may see more consolidation or a test of upper resistance if bulls continue to lean into dip-buying strength.

Market Sentiment and Key Levels

SPY closed at $648.85, holding well above the $645 support zone and sitting just below resistance at $650. Overall sentiment remains cautiously bullish, with bulls maintaining control as long as price holds above $644. Key resistance sits at $650, $653, and $655, with $656 above that as a breakout trigger. On the downside, support is layered at $645, $644, $642, and $640. A break below $640 would invite more aggressive selling, while continued closes above $645 suggest bulls are still in command. The path of least resistance remains to the upside as long as dip buyers show up at key levels.

Expected Price Action

Our AI model projects SPY to trade between $645 and $651 on Tuesday. This is actionable intelligence generated by our AI model. The range suggests a choppy session with potential for brief trending periods. The bias remains bullish, with a focus on reclaiming and holding $650. If bulls push SPY above $650, targets at $653 and $655 come into view. A breakout above $655 would likely lead to a move toward $660. Conversely, if SPY loses $645, expect tests of $644 and $642, with $640 as the final line in the sand before sentiment shifts more bearish. Traders should stay flexible as markets navigate low-volume conditions and await inflation data later in the week.

Trading Strategy

Long trades are favored above $645, targeting $650, $653, and $655. Breakouts above $655 open the door to $660, but traders should take profits along the way and tighten stops near resistance. Short trades are viable only on breaks below $645 with quick targets at $644, $642, and $640. A sustained move below $640 could trigger a steeper drop to $635. The VIX closed at 15.35, reflecting subdued volatility, but we anticipate this could change rapidly with Wednesday and Thursday’s inflation data. Stay nimble, reduce position sizes ahead of key data drops, and manage risk tightly, especially if trading against the trend. With the market in a bullish channel but vulnerable to surprise macro headlines, keeping exposure light until the FOMC may prove to be the wisest move.

Model’s Projected Range

SPY’s projected range for Tuesday sits between $644.25 and $652.50, with the Call side dominating in a narrowing band that suggests choppy price action with intermittent trending periods. With no news to move the markets, the session was mostly sideways as traders waited for an external catalyst. SPY managed to hold above $645 and closed at $648.83. Dips continue to be bought as participants anticipate the Fed may cut rates by as much as 50 basis points next week. The bulls remain in control of the broader narrative. Volume today was just below average as the market awaits the Fed decision. It is still probable SPY will make new highs before that meeting, which we believe may turn into a sell-the-news event. Until then, we expect SPY to drift higher or consolidate sideways before choosing a clear direction. The bulls will defend $645 overnight, and a failure there opens the door to $642, while a break below that would bring $640 back into play. Until SPY falls to $640 or lower, the bears will only dabble while the bulls maintain the upper hand. Our base case remains a 10–15% pullback at some point, yet we continue to view any weakness as a buying opportunity until FOMC and recommend buying every dip above $640. With SPY closing above $645, it is likely the market retests last week’s highs with a run toward $655 a distinct probability. A move to $660 is still required to confirm the recent breakout, and failure to reach that level would suggest a near-term top, particularly given September’s reputation for negative returns. For Tuesday, choppy action is likely, with resistance at $650, $653, $655, and $656, and support at $645, $644, $642, and $640. Since reclaiming $585, SPY has held a steady uptrend fueled by dip buyers. Today Mag stocks were mixed, with Tesla, Apple, and Google falling while the others rose. Until weakness emerges in these leaders, or ETH closes below $4300, prices are likely to grind higher. We continue to favor quick profit taking and caution with overnight holds. The VIX fell 0.46% to 15.11, and while September often sees VIX reach 20, contango in VXX futures suggests volatility may drift lower into FOMC. Still, if you have not added protection to your long book, now is the time. VIX below 23 supports the bullish case, but a breakout above it could finally spark the long-anticipated pullback. SPY closed just below the lower bound of the bull trend channel from the April lows, teetering on a line where a red day could signal the start of a downtrend, while a green day would push it back into the current steep, uncorrected bull channel.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a Bullish Trending Market State, with SPY closing just above MSI resistance. While there were no extended targets into the close, bullish extended targets printed in the premarket and morning sessions. The MSI rescaled higher overnight indicating the bull trend was still intact. Extended targets stopped printing just before noon which saw SPY pull back during the afternoon session. Price moved mostly sideways however, within the MSI range until the final hour, when SPY moved up to close basically flat on the day. For Tuesday the MSI is forecasting slightly higher prices, though more likely with a retest of lower levels before any material push higher. MSI support is at $647.51, with resistance at $648.63.
Key Levels and Market Movements:
On Friday we wrote, “the market is likely to take a breather,” and noted, “We expect price to retest lower levels around $645, but dips should be bought once again,” while also stating, “Our bias remains to buy on dips while also considering short setups on failed breakouts near the all-time highs.” With that context, and with the MSI opening in a Bullish Trending Market State with extended targets above in the premarket, we were eager to find a long entry, but with SPY already near major resistance at $650 and knowing every recent new high had been an opportunity to short, we waited for a pullback and failed breakdown to get long. A less-than-perfect setup emerged at 10:15 AM, and we entered long at $648.20 with a first target at the premarket level of $651. We recognized this was a stretch but without an MSI level to lean on, we set T1 and waited. The move came quickly, and SPY formed a triple top at $649.80, well above our $1 minimum target for T1. We exited 80% of the position there and left the remaining trail for T2 at our original target. At 11:40 AM, however, a less-than-perfect failed breakout on the triple top coincided with extended targets stopping, so we exited and reversed at $649.30 with a stop just above the day’s highs. We set T1 at MSI support at $647.50, expecting the market to test lower levels per our plan. SPY reached the target but then formed a textbook failed breakdown. Rather than risk the day’s profits on a third trade in what was clearly a sideways market, we closed the short in full and called it a day. Two for two by 2 PM on a Monday that offered few opportunities, and while the gains were modest, we closed green once again thanks 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 no economic news and is likely to be a repeat of today. We expect some upward drift overnight but mostly chop. The bulls will defend $645 overnight, which will keep the bull trend intact. A move below $645 could open the door to lower prices, but we view this as a low probability and expect dips to be bought once again. The bulls remain in control until the bears push price below $640. It is very possible we continue to see new all-time highs before FOMC on the 17th. Our bias remains to buy on dips while also considering short setups on failed breakouts near the all-time highs or on a break below $645. 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 $649 to $661 and higher strike Calls implying the Dealers belief that prices may pause at current levels. The ceiling for Tuesday appears to be $650. To the downside, Dealers are buying $648 to $595 and lower strike Puts in a 3:1 ratio to the Calls they’re selling displaying little concern that prices could move lower tomorrow. Dealer positioning is unchanged from slightly bearish/neutral to slightly bearish/neutral.
Looking Ahead to Friday:
Dealers are selling SPY $649 to $670 and higher strike Calls indicating the Dealers belief that prices may pause this week and not move significantly higher. The ceiling for the week is likely $652. To the downside, Dealers are buying $648 to $540 and lower strike Puts in a 5:1 ratio to the Calls they’re selling, reflecting a bearish outlook for the week. For the week Dealer positioning is unchanged from bearish to bearish. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly and tracking them is essential for staying ahead of shifting market sentiment.

Recommendation for Traders

SPY closed Monday at $648.85, just above critical support and just below the broader bullish trend channel. Long trades remain favored above $645 with upside targets at $650, $653, and $655. Breakouts above $655 could invite a fast move to $660. Traders should only consider shorts below $645 with quick downside targets at $644 and $640. The VIX sits at 15.35, reflecting low volatility but could spike with mid-week inflation data. Stay nimble, manage risk carefully, and watch for failed breakouts or breakdowns near the major levels. As always, review the premarket analysis posted before 9 AM ET to account for any changes in our model’s outlook and in Dealer Positioning.

Good luck and good trading!