Market Insights: Tuesday, October 14th, 2025

Market Overview

Markets diverged on Tuesday as renewed tensions between the US and China clashed with cautious optimism around earnings season and policy expectations from the Fed. The S&P 500 slipped 0.13%, the Nasdaq led the losses with a 0.76% decline, while the Dow managed a 0.44% gain, lifted by strength in industrials and energy. Market sentiment turned increasingly fragile throughout the session, exacerbated by President Trump’s late-day Truth Social post accusing China of “purposefully not buying” US soybeans and threatening to halt purchases of Chinese cooking oil products. He called China’s behavior an “Economically Hostile Act,” reigniting fears of escalation just days after a more conciliatory message.

Earlier in the session, China ramped up retaliation by targeting US-linked shipping operations, placing sanctions on five South Korean units tied to American business and levying new port fees on US vessels. These tit-for-tat actions shook hopes of de-escalation, especially with Trump and Xi still expected to meet later this month. Fed Chair Powell, speaking at the NABE annual meeting, reiterated that the Fed’s outlook on employment and inflation remains unchanged, signaling flexibility and reinforcing market expectations for rate cuts. The remarks came amid a continued lack of data releases due to the government shutdown, placing greater weight on Fed communication and corporate earnings.

The day began with uncertainty and a modest overnight dip but saw a midday rally as SPY found support near Monday’s lows. Earnings season kicked off with mixed results from JPMorgan, Goldman Sachs, Citigroup, and Wells Fargo. JPMorgan and Goldman saw strong profits from increased dealmaking, but shares declined, suggesting high expectations and little margin for error. Meanwhile, AMD surged after announcing a 50,000 AI chip deal with Oracle, highlighting the continued jockeying for dominance in the artificial intelligence race. The session ended with volatility as Trump’s latest comments erased some gains, keeping traders on edge ahead of a week heavy with macro and earnings risk.

SPY Performance

SPY dipped 0.13% to close at $662.16 after opening at $657.15 and trading as low as $653.17 before rebounding sharply to hit an intraday high of $665.81. Volume was above average at 82.91 million, indicating elevated interest amid volatile headlines. While the close just under $663 keeps bulls in striking distance of reclaiming control, the late-day pullback reflects lingering caution. The bulls defended key support at $653 and rallied strongly, but resistance at $665 remains firm.

Major Indices Performance

The Nasdaq underperformed, falling 0.76% as weakness in large-cap tech and the Magnificent Seven weighed on sentiment. The S&P 500 edged down 0.13%, while the Dow climbed 0.44%, boosted by strength in industrials and financials. The Russell 2000 led all major indices, advancing 1.28% in a sign of risk appetite among small caps. The divergence between tech and cyclicals reflects growing market uncertainty around macro and geopolitical developments.

Notable Stock Movements

The Magnificent Seven stocks had a mostly red session, with only Apple and Alphabet managing to close green, up 0.04% and 0.54%, respectively. Nvidia, Tesla, Meta, Amazon, Microsoft, and Netflix all closed lower. AMD surged following its AI chip deal with Oracle, highlighting sector leadership rotation. Financials saw mixed action despite earnings beats, while energy and industrial names helped lift the Dow. Crypto-related equities pulled back in tandem with digital assets.

Commodity and Cryptocurrency Updates

Crude oil fell 1.68% to close at $58.49, breaking below the $60 level our model has been forecasting for months. The move suggests downside momentum may persist toward $50 if macro headwinds continue. Gold rose 0.70% to $4,162, maintaining strength amid geopolitical stress. Bitcoin dropped 2.65%, settling just above $112,600, while Ethereum also weakened, confirming the day’s broader risk-off tone in the crypto space.

Treasury Yield Information

The 10-year Treasury yield slipped 0.74% to 4.027%, continuing to retreat from recent highs. While still elevated, the move lower reflects both safe-haven demand and fading fears of near-term rate hikes. The market remains sensitive to any move above 4.5%, which would signal danger for equities. A rise past 5% would likely trigger a broader correction. For now, yields are consolidating in a range that supports equity stability, but any shock could reignite volatility.

Previous Day’s Forecast Analysis

Monday’s forecast suggested that the bulls would try to defend $658 and make a push toward $665. While Tuesday opened below bias at $657.75 and initially dropped to test $653, SPY quickly found support and rallied above resistance to hit $665.81 before closing just below the key $663 level. The roadmap called for two-way action and cautioned against early shorts, which proved accurate as price chopped early before a strong intraday reversal.

Market Performance vs. Forecast

Tuesday’s performance largely tracked the roadmap’s expectations. Price moved lower to test $653 early, as projected, and then staged a strong rally toward the $665 level. The warning to avoid aggressive early short entries was critical, as the market rebounded sharply midday before giving back some gains late. The intraday structure played out with high clarity, especially around bias levels and projected turning points.

Premarket Analysis Summary

Tuesday’s 7:30 AM premarket note warned that SPY had dipped overnight and was testing key levels, with downside targets at $653 and $650 and upside potential to $664.75 or higher if bias at $657.75 was reclaimed. SPY respected this outlook, initially testing the lower targets before recovering and tagging the upper zone nearly perfectly. The call for cautious trading and looking for failed breakdowns or rejections provided high-value entry cues.

Validation of the Analysis

SPY’s action on Tuesday validated the roadmap’s flexible bias and precision in level selection. The $653–$665 range held, and bias was successfully used to time the shift in control from bears to bulls. Though SPY couldn’t close above $663, it did hold above support and managed a strong midday recovery. Traders who followed the premarket structure likely captured gains on both sides, depending on execution.

Looking Ahead

SPY remains in a broad range, with bulls and bears battling for control. Earnings and macro news are the key catalysts this week, with PPI, Retail Sales, and Unemployment Claims due Thursday. A close above $663 would give bulls the edge, while a failure to hold $653 could trigger a test of $640. Wednesday is likely to feature two-way trading, and traders should watch the range extremes at $650 and $665 for opportunities.

Market Sentiment and Key Levels

SPY closed at $662.16, just under the pivotal $663 level. Resistance sits at $665, $669, and $671, while support lies at $660, $658, $655, and $650. Above $665 lies a thick wall of resistance, while below $655, structural support is sparse until $650. The 50-day moving average held again today but is being tested repeatedly. The VIX rose 9.35% to 20.81, reflecting a market on edge. A sustained VIX breakout above 23 would invalidate the current bullish bias and possibly spark a deeper correction.

Expected Price Action

The model projects SPY’s maximum range between $654 and $669.25 for Wednesday. Two-way price action remains the dominant expectation with $660 acting as a magnet. Bulls need a clean break above $663 to reclaim momentum, while a move below $653 would suggest another leg lower is beginning. Expect intraday chop interspersed with strong directional moves on key headlines or earnings surprises.

Trading Strategy

Wednesday favors tactical entries near the range extremes. Long trades are appropriate above $663 targeting $665–$669. Below $653, short bias takes over with targets at $650 and $640. Continue to fade rallies near resistance and buy support only if price confirms. With the VIX rising and range expanding, tight stops and clear confirmation are essential. Monitor sentiment and react to price—not predictions. Maintain discipline and remain flexible.

Model’s Projected Range

SPY’s projected maximum range for Wednesday sits between $654 and $669.25, with the Put side dominating in an expanding band that suggests trending price action interlaced with periods of chop. There is no scheduled economic data, but major bank earnings kick off this week and could shape short-term direction. Today it was tit-for-tat tariff and port fee headlines out of China and the White House that initially pushed the market lower before SPY found major support at Monday’s lows and ripped higher the rest of the day, closing up 0.12% at $662.23, just below the dividing line between bull and bear control. The key question remains whether the bottom is in or if there’s still work for the bulls to do before declaring an end to the recent weakness. Our expectation for Wednesday is that SPY will continue trading within a wide range between $653 and $666, with $660 acting as the magnet in the middle. The bulls need a close above $663 to regain full control and push toward all-time highs, while a break below $653 would likely lead to another leg lower, potentially testing $640 where the bulls must make a stand. Once again, the bulls bought the dip and will try to build on that momentum to push through $665. We warned yesterday that “the bulls may bait the bears by driving prices lower only to trap and squeeze them with another sharp rally,” and that’s precisely what played out today. With price still well above the $640 “line in the sand,” the bulls remain solidly in the game and will defend lower levels aggressively. While the gain today was modest, closing just below $663 keeps the bulls within striking distance of a break above this level, though the late-day selloff gives reason for caution. It’s likely SPY tests lower levels once again before breaking out of this wide range. As such, expect two-way trading on Wednesday that favors fading the range extremes. Macro risks remain high with the ongoing government shutdown and renewed tariff tensions, so continue to trade the market that’s in front of you. For weeks we’ve noted that until sustained weakness emerges, the broader trend remains higher and one or two down days do not make a bear market. The 50-day moving average was tested again today and held, but another test of that level could easily fail. For Wednesday, resistance sits at $665, $669, and $671, with support at $660, $658, $655, and $650. Above $665 lies a heavy wall of resistance likely to limit gains, while below $655 there’s little structural support until $650. Since reclaiming $585, SPY has maintained a steady uptrend fueled by dip buyers, despite recent turbulence. However, crypto and most Mag stocks lagged today, an worrisome sign in a strong bull market. Continued weakness in these leaders could trigger the 10–15% correction we’ve been forecasting into year-end. Bulls still hold the advantage, but the picture is far less clear, and any external shock could flip control back to the bears. The VIX rose 9.35% to 20.81, signaling lingering volatility. VIX below 23 supports the bullish case, but a sustained breakout above that level could finally ignite the long-awaited correction. SPY has now closed three straight sessions below the lower bull trend channel from the April lows, hinting at the early stages of a potential bear trend. The model has not yet redrawn the channel, reflecting uncertainty about the next phase. As we often say: big up followed by big down equals big confusion and a confused market tends to trade in ranges rather than in one clear direction. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a Ranging Market State, with SPY closing at the upper end of the range. There were extended targets both above and below price today with the rally off the day’s lows printing extended targets above that saw the MSI rescale higher several times into the noon hour. Extended targets stopped printing and the market moved sideways until a late flush saw the MSI rescale lower to its current ranging state. Overnight the MSI rescaled lower on a market that gapped down and printing extended targets below which saw price test the prior day’s lows. The MSI currently is forecasting more range trading for tomorrow likely capped @ $666 with a low of @ $653. MSI resistance is $663.35 with support at $658.82.
Key Levels and Market Movements:
On Tuesday we wrote, “Markets are still likely on edge following the recent tariff headlines, making it critical to trade what you see,” and noted, “With a close above $663, the bulls have taken back control—but only marginally,” while also stating, “Overnight, the bulls want to defend $658, and if that level holds, the market is likely to break the day’s highs and push toward $667. Should $658 fail, support at $650 and possibly $645 comes into play.” With this context, and with the MSI testing Monday’s lows at $653 and the 50 DMA, a textbook failed breakdown presented itself early in the session. However, with extended targets still printing below, we waited for them to stop before entering. Once they cleared, we went long at $645.75 and set our first target at MSI support turned resistance at $656.60. With T1 secured quickly, we set T2 at MSI resistance at $660.30, which was reached during the morning session. With both targets in hand and our stop moved to breakeven, we had little to do but trail. The next logical upside level was the premarket resistance at $664.75, so we held patiently until SPY reached that mark around 1 p.m. With extended targets printing above and the MSI rapidly rescaling higher, we continued to hold until 1:50 p.m. when SPY printed a failed breakout. That prompted us to exit the long and reverse short, expecting a possible late-day pullback. We set T1 at MSI support at $663.30, which took until the final hour to reach. Once price hit that level, we used the premarket report to set T2 at $660.25. SPY dipped to exactly that level, allowing us to take T2 and continue trailing, hoping for a deeper flush into the close. That final leg never came, as SPY rebounded, so we closed our remaining 10% runner at $662.25. A clean execution overall—a massive long off the day’s lows followed by a disciplined countertrend short to end another strong trading day. Two for two thanks 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:
Wednesday has no scheduled economic news, but markets remain on edge following the recent tariff and China headlines, making it essential to trade what you see. With a close just below $663, the bulls have regained control, but only slightly. With the MSI in a ranging state, the market will likely move both higher and lower on Wednesday, testing each side of the range unless an external catalyst shifts sentiment. As such, remain flexible and monitor the MSI closely for directional cues. The projected range for Wednesday is wide, so aligning with the MSI trend and staying with it remains the best way to capture gains. Failed breakouts and failed breakdowns continue to offer the highest-probability setups in this environment. Overnight, the bulls want to defend $658, and if that level holds, the market is likely to break the day’s highs and push toward $667. Should $658 fail, support at $650 and possibly $645 comes into play, with $640 serving as the critical level that must hold to preserve the broader bull trend. A break above $667 would likely lead to new all-time highs, while the bears only gain full control on a decisive drop below $640. As always, trading failed moves remains one of the most reliable setups in this type of market. 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 $663 to $690 and higher strike Calls while also buying $664 and $670 Calls indicating the Dealers’ desire to participate in any rally on Wednesday. The ceiling for tomorrow appears to be $669. To the downside, Dealers are buying $662 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 tomorrow. Dealer positioning is unchanged from bearish to bearish.
Looking Ahead to Friday:
Dealers are selling SPY $670 to $690 and higher strike Calls while also buying in size $663 to $669 Calls indicating the Dealers’ desire to participate in any relief rally this week. The ceiling for the week appears to be $675. To the downside, Dealers are buying $662 to $540 and lower strike Puts in a 5:1 ratio to the Calls they’re selling/buying, 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

Markets remain volatile with mixed signals. SPY closed below $663, so bulls must defend $660 and push above $665 to regain clear control. Below $653, momentum shifts back to the bears. Use MSI, premarket levels, and range extremes to guide entries. Watch for failed moves at key levels. Earnings and macro news remain the wildcards. Trade the market in front of you, focus on process and let the setups come to you.

Good luck and good trading!