Market Insights: Monday, October 20th, 2025

Market Overview

US stocks surged Monday, kicking off the week with strong gains as Apple led a tech-driven rally and investors looked ahead to a packed earnings calendar. The Dow Jones climbed over 500 points, gaining 1.12%, while the S&P 500 added 1.04%, and the Nasdaq outperformed with a 1.37% advance. Apple soared nearly 4% to a record high on continued iPhone 17 demand, providing a strong boost to the broader technology sector. Investors appeared to shrug off recent concerns around tariffs, macro risks, and the ongoing government shutdown in favor of near-term optimism driven by corporate earnings.

With Netflix, Tesla, Intel, and Coca-Cola among the high-profile names reporting this week, market participants are positioning for potential upside as earnings season moves into full swing. Zions Bancorp will report after the bell, and traders are closely watching for any commentary related to the bad loan disclosures that triggered last week’s credit quality fears across regional banks. Meanwhile, gold surged to a new all-time high, reversing Friday’s brief pullback, as investors continued to rotate into safe havens amid geopolitical tensions and monetary policy uncertainty.

Trade-related concerns eased slightly after Treasury Secretary Scott Bessent noted that US-China relations had “deescalated,” with diplomatic talks set to resume this week in Malaysia. Over the weekend, President Trump reiterated that rare earths, fentanyl, and soybeans were the administration’s top concerns, hinting at a more measured approach on tariffs heading into the November 1 deadline. At the same time, the federal government shutdown entered its third week, with negotiations still stalled over healthcare subsidies. Economists are warning that the prolonged disruption could temporarily drag GDP, though expectations for a recovery remain intact. The delayed CPI report is now set for Friday and may have outsized influence on the Fed’s upcoming rate decision. Elsewhere, a major Amazon Web Services outage disrupted platforms from Robinhood to Reddit early Monday, though services were mostly restored by the afternoon.

SPY Performance

SPY opened at $667.30 and steadily climbed throughout the session, reaching an intraday high of $672.21 before settling at $671.31, up 1.04% on the day. Volume came in slightly below average at 54.37 million shares, a quieter tape despite the solid gains. The session confirmed a technical breakout above the recent resistance at $664, with bulls extending their edge and resuming control of short-term market direction. SPY has now broken above its two-week consolidation zone, and with the VIX continuing to fall, momentum appears to favor another run at all-time highs barring a negative earnings or macro surprise.

Major Indices Performance

It was a strong day across the board. The Nasdaq led gains with a 1.37% rally driven by tech leadership, while the Dow and S&P each climbed just over 1%. The Russell 2000 posted an outsized gain of 1.92%, marking a rare day of outperformance for small caps. The positive breadth underscored renewed risk appetite, as investors looked past macro headwinds in favor of earnings optimism and improving technicals. With the government shutdown sidelining data releases, traders remain laser-focused on corporate results to guide positioning.

Notable Stock Movements

The Magnificent Seven saw a green day across the board except for Nvidia, which slipped 0.32% as traders took profits after last week’s strong run. Apple surged nearly 4% to lead the pack, while Microsoft, Amazon, Alphabet, Meta, and Tesla all gained modestly. The broad-based tech rally helped propel the Nasdaq to fresh multi-week highs. Crude oil-related names were mixed following a slight dip in oil prices, while gold miners surged alongside bullion’s rally to a new record. Crypto-linked stocks also rebounded as Bitcoin reclaimed key technical levels.

Commodity and Cryptocurrency Updates

Crude oil edged lower by 0.24% to settle at $57.01 after briefly pushing back above the $60 level last week. As noted in prior reports, our model has been forecasting this test of $60 for several months. With that target now met, the path lower toward $50 becomes increasingly likely if sellers maintain pressure. Gold climbed 3.91% to $4,377, a new all-time high. The metal's breakout confirms persistent demand for safety amid an uncertain macro backdrop. Bitcoin rose 1.69% to close above $110,600, continuing its rebound after recent volatility. The renewed strength in both crypto and metals reinforces the broader risk-on shift now underway.

Treasury Yield Information

The 10-year Treasury yield dipped 0.70% to close at 3.982%, back below the critical 4% threshold. The move reflects renewed demand for bonds and is supportive of equities in the near term. However, yields remain in a precarious range. Any move above 4.5% could begin to weigh on stocks, with steeper declines expected above 4.8%. Should yields climb to 5.2%, a 20% or greater correction in equities becomes likely. For now, the drop in yields aligns with the rally in risk assets and offers temporary relief from rate-driven headwinds.

Previous Day’s Forecast Analysis

Monday’s forecast projected a likely range between $653 and $675.50, with a bias toward the upside if SPY held above $664. The ETF opened at $667.30, well above bias, and never looked back, reaching a high of $672.21 before settling at $671.31. The roadmap correctly emphasized a potential breakout scenario, citing the inside-day formation and mounting bullish energy. That upside resolution played out precisely, with bulls pushing decisively past resistance zones as forecasted.

Market Performance vs. Forecast

SPY traded within the projected range and followed the forecasted bullish path. The roadmap highlighted $664 as the dividing line, and Monday’s price action confirmed that level’s importance. The clean break above triggered trending behavior that aligned with our model’s expectation for post-consolidation strength. Traders who followed the levels had a textbook breakout day, validating the tools and reinforcing discipline around entry zones and exit targets.

Premarket Analysis Summary

Monday’s premarket forecast leaned cautiously bullish, citing $666.75 as the bias level. A move above that level, we noted, would open the door to $667.75 and $670.75. SPY opened at $667.30, quickly took out $666.75, and pushed beyond $670.75 by midday, reaching $672.21 before easing slightly. The day played out as anticipated, with a lackluster open giving way to steady gains as buyers stepped in aggressively. The premarket note’s warning to temper enthusiasm early in the week proved helpful, as the rally developed gradually rather than in an explosive fashion.

Validation of the Analysis

The model’s levels were respected across the board, with $663 acting as early support and $670.75 serving as a logical extension target before the session stalled. The clean structure and reliable follow-through confirmed the analysis, and the decision to lean bullish above bias offered strong trade alignment. The market’s trend behavior mirrored our MSI shift from ranging to bullish, and price remained orderly throughout, providing ample opportunity for strategic execution.

Looking Ahead

SPY’s projected range for Tuesday sits between $668 and $675, with Dealer positioning favoring Calls in a narrowing band. The bulls maintain momentum, and with major earnings ahead, another push higher is plausible. However, the lack of scheduled economic data increases the likelihood of headline-driven volatility. A break above $673 could lead to a test of $678 and possibly $680, while failure to hold $668 may trigger a quick retreat toward $663 and $660.

Market Sentiment and Key Levels

With SPY closing at $671.31, bulls retain control. Price is now firmly above the $663 bull/bear threshold, and a new leg higher is underway. Resistance lies at $673, $675, $678, and $680. Support levels include $670, $668, $663, and $660. Above $673 lies a dense resistance zone, but bulls have shown a willingness to buy every dip. Only a move below $660 puts the trend in jeopardy. The VIX fell another 12.19% to 18.23, confirming the return of risk appetite and the bullish tilt.

Expected Price Action

Tuesday is likely to feature more upward bias, but with earnings events looming, price action may stall near upper resistance levels. Two-way movement is expected early, especially if SPY retests $668. If that level holds, bulls may continue toward $675 and above. A break below $663, however, would open the door for a retest of $660 and potentially lower. Until key support breaks, the trend remains up, and the path of least resistance is higher.

Trading Strategy

Stick with the trend but reduce size near resistance zones. Longs near $668 or on dips to $663 remain favorable, while shorts only become attractive near $678–$680 if price stalls or reverses. Avoid chasing breakouts without confirmation, and use the MSI and dealer levels to frame execution. With volatility dropping and trend strength returning, disciplined trades at support and resistance remain the highest-probability setups.

Model’s Projected Range

SPY’s projected maximum range for Tuesday sits between $666.75 and $677, with the Call side dominating in a narrowing band that suggests choppy price action interlaced with periods of trending movement. There is no scheduled economic data on Tuesday, but with earnings season underway and every headline from the White House sparking reactions, the market remains highly sensitive to short-term news flow, so it’s essential to trade what you see and stay alert for major earnings releases like Netflix after the bell tomorrow and Tesla Wednesday after the close. Today the recent big confusion resolved decisively with a breakout back toward all-time highs. SPY rallied 1.04% to close at $671.30, well above the $663 bull/bear control level, meaning the bulls have resumed complete dominance over the market. Expect new highs in the coming days as above $663 the bulls are likely to drive prices higher, while below it, SPY could again drift toward recent lows. For the bears to have any chance at reversing the longer-term trend, SPY must break last Friday’s low at $653; if that happens, $640 becomes the key level where bulls must make a stand to avoid a confirmed bear market. Once again, the bulls showed resilience, aggressively buying the overnight and premarket dip to $665 before pushing the market sharply higher all session. On Friday, we warned that “sideways movement builds energy for a breakout, and with the longer-term trend still up, that breakout typically favors the upside,” which is exactly what unfolded today. While macro risks remain high with the ongoing government shutdown and renewed tariff tensions, the bulls continue to overlook these external threats and are putting capital to work to avoid missing a potential year-end rally. Continue to trade the market in front of you, not the one you expect. For Tuesday, resistance sits at $673, $675, $678, and $680, with support at $670, $668, $663, and $660. Above $673 lies a dense wall of resistance likely to cap gains near $678, while below $660 there’s little structural support to keep prices elevated. Since reclaiming $585, SPY has maintained a broad uptrend fueled by dip buyers despite recent volatility, though that structure has weakened modestly. Crypto and all Mag stocks rallied hard today, reinforcing the risk-on environment and the return to a strong bullish uptrend. As we’ve emphasized for weeks, until persistent weakness appears in key market leaders and crypto, the broader trend remains higher, though sustained softness in those areas could still trigger the 10–15% correction we’ve been forecasting into year-end. The bulls maintain complete control, and the bears remain sidelined unless price dips back below $663. The VIX fell 12.19% to 18.23, signaling an easing in volatility, and SPY closed mid-bull channel from the April lows, a structure that has weakened slightly but remains intact and supportive of the ongoing uptrend.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a Bullish Trending Market State, with SPY closing well above resistance turned support. Extended targets printed the entire session which saw SPY relentlessly move back toward all time highs. Overnight the MSI rescaled sharply higher several times, finding buyers at $665 which led to the up and to the right day on average volume. With extended targets printing all day there was little to do but ride the trend higher. For Tuesday the MSI is forecasting higher prices and follow through to today’s rally but likely at a much slower pace. MSI support is $665.76 and lower at $662.58.
Key Levels and Market Movements:
On Friday we wrote, “While VIX dropped hard today, it remains above 20, meaning market moves are still likely to be exaggerated,” and noted, “With a close above $663, the bulls once again hold a slight advantage heading into Monday,” while also stating, “Overnight, the bulls want to defend $658, and if that level holds, the market is likely to move toward $670.” With this context, and with the MSI rescaling higher several times overnight and extended targets printing above in the premarket, we looked for a long signal right out of the gate. There wasn’t much structure to lean on for this long, other than a breakout from the tight three-day range SPY had been stuck in. It wasn’t an easy trade to enter since it triggered on the opening bar, but trusting the MSI and the extended targets, we went long at $668.50 and set T1 at the premarket level of $670. SPY cooperated immediately and by 10:30 a.m., with T1 secured, we needed a new target since the MSI hadn’t rescaled and the premarket levels offered nothing above $670. We moved our stop to breakeven to protect profits and simply trailed the remaining 30% of our position, watching for a signal to close. SPY popped to $671.25 and formed a double top, tempting us to exit, but with extended targets persisting we held firm. That patience paid off as another pop at 1 p.m. created a clean triple top at $672, giving us the signal to exit the trade in full and lock in a solid one-and-done win for the day 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 scheduled economic news, yet the administration remains noisy, and the market continues to react sharply to every tweet or post out of the White House. While VIX dropped hard today, it remains above 18, meaning price moves are still likely to be exaggerated. Today’s breakout from last week’s range confirmed the resumption of SPY’s broader bull trend, but after such a strong move off the lows, it’s time to take a step back and let price discovery unfold, especially since volume today was just average. The bulls remain firmly in control, and the next push higher will likely test the all-time highs. For the bears to even hint at participation, SPY must drop to at least $666 overnight, otherwise, the path of least resistance remains up. External catalysts, positive or negative, can still move markets abruptly, so it’s essential to trade what you see and stay flexible. With a close well above $663, the bulls clearly rule the tape, and with the MSI in a bullish state and extended targets printing into the close, the market will likely push higher but at a slower pace. The projected range for Tuesday is narrow, implying more sideways consolidation and two-way trading. Failed breakouts and failed breakdowns continue to offer the highest-probability setups in this environment. Overnight, the bulls want to defend $666, and if that level holds, the market is likely to push toward $675 or even $678, where resistance could prompt a pause or rejection. Should $666 fail, $663 comes into play, opening the door to the bears, though $640 remains the critical line that must hold to preserve the broader bull trend. 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 $672 to $690 and higher strike Calls while also selling $667 to $671 Puts implying the Dealers’ belief that prices will continue to rise on Tuesday. Dealers do not sell ATM Puts without the belief that prices will move higher. The ceiling for Tuesday appears to be $675. To the downside, Dealers are buying $666 to $600 and lower strike Puts in a 3:1 ratio to the Calls/Puts they’re selling/buying 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 $672 to $690 and higher strike Calls indicating the Dealers’ belief that prices may pause at these levels or rise just slightly. The ceiling for the week appears to be $675. To the downside, Dealers are buying $671 to $540 and lower strike Puts in a 4:1 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

The bulls have resumed control, and SPY’s clean breakout above $664 confirms upward bias. Trade the trend, but don’t get complacent. Use the MSI and model levels to stay on the right side of momentum, and avoid crowded breakouts without confirmation. With key earnings ahead and macro risks still looming, this market favors tactical precision over aggressive positioning.

Good luck and good trading!