Market Insights: Wednesday, October 28th, 2026
Market Overview
Stocks edged higher Wednesday as investors digested the Federal Reserve's decision to hold rates steady and turned their attention to Microsoft and Alphabet earnings. The Dow gained roughly 0.2%, while the S&P 500 and Nasdaq each climbed about 0.3%, giving the S&P and Nasdaq back-to-back gains. The Fed voted 10-2 to keep its benchmark rate in the 3.75% to 4% range despite elevated inflation readings. Cleveland Fed President Beth Hammack and Fed Governor Lisa Cook dissented because they wanted a rate hike. The market doesn't think the Fed will sit still for long, though. Bloomberg data shows traders pricing in about an 85% chance of a quarter-point hike at the next meeting on Dec. 9, roughly where those odds stood before the decision. Further out, traders expect the funds rate to climb from about 3.9% now to nearly 4.7% by September 2027, which works out to about three more quarter-point hikes, slightly more than they expected Tuesday. If the Fed hikes in December, it simply matches expectations, but another hold would mean traders got ahead of the central bank. Fed Chairman Kevin Warsh also shook up the calendar. He said eight meetings a year is the right number, but in 2027 one of them will focus only on broad monetary policy strategy, with no rate vote and no policy statement. In 2028, he expects two strategy meetings and six policy meetings. "Getting policy right involves assessing near-term developments at timely, regular, and information-rich intervals," Warsh said, adding that "it's equally important we reserve time and space as an intellectually diverse group for strategic deliberations for thinking anew about big questions, looking out over longer time horizons."
Tech sentiment has clearly improved this week. Semiconductor stocks rose for a third straight day after South Korean memory chipmaker SK Hynix reported a 632% year-over-year profit jump, with peers Micron and Samsung also moving higher. Oracle was the standout, jumping 12% after projecting at least $225 billion in fiscal 2030 revenue, which works out to annualized growth of more than 35% from fiscal 2026. The company expects capital spending to peak in fiscal 2027 and 2028 as it builds out capacity for its cloud and AI businesses, then decline in fiscal 2029. Oracle sees positive free cash flow arriving in the second half of fiscal 2028 and set a free cash flow target of more than $30 billion for fiscal 2029, which suggests today's heavy spending should turn into serious cash generation down the road. The next big test comes after the bell, when cloud leaders Microsoft and Alphabet report and give fresh updates on AI demand and their capex plans. Microsoft's report lands just after it offered buyouts to up to 60,000 employees as it tries to streamline operations during the AI build-out.
SPY Performance
SPY opened at $771.43, gapping up from yesterday's close of $769.71 and starting the session just above $771.13, the high we flagged as the level to beat. That meant the bulls cleared their first hurdle before the opening bell even rang. SPY built on that early strength and climbed to a session high of $773.35, setting a new best mark for this recovery. Sellers made their usual midday push, and the session low of $769.25 briefly dipped just under yesterday's close. But they never came close to testing $767.73, the first line of support we laid out. Buyers stepped back in from there, and SPY finished at $772.39, closing above both its open and yesterday's high of $771.13.
SPY gained 0.35%, its third straight up day, and once again it closed above its open. That's now three sessions in a row where buyers have added to gains during regular hours instead of just coasting on an overnight gap. The bigger story today is volume. Turnover came in at 26.40 million shares. That's still below average, but it's the first time during this rebound that participation actually picked up from the prior session. It's not a flood of new money, but it breaks the pattern of rallies on shrinking volume, and that's a step in the right direction. The VIX dropped 3.77% to close at 16.86, its third straight decline, and it keeps moving further away from the 20 area. Traders are steadily pulling their hedges, and the fear that fueled last week's selling is fading fast.
The bulls delivered again by closing above $771.13, extending the recovery into fresh territory for this move. The gains are getting smaller each day, though, which is something to watch as the rally matures. On the upside, today's high of $773.35 is the next level to beat, and a close above it would keep the momentum rolling. On the downside, $771.13 now becomes the first line of support, followed by today's low of $769.25 and then $767.73. A close back below $766.71 would undo much of this three-day climb and suggest buyers are running out of steam, and a drop under $764.44 would put the bears back in the driver's seat. For now, the trend is clearly bullish, the VIX keeps falling, and volume is finally showing a little life. That's a better setup than we've had all week. Even so, until participation climbs back above average, this rally deserves respect, but not blind trust.
Major Indices Performance
The Nasdaq took the top spot again with a 0.27% gain, but this was a far cry from the confident surge of the prior session. Buyers were still willing to nibble at growth names, yet the enthusiasm cooled noticeably as mixed action among the biggest tech names kept a lid on the index. Some heavyweights pushed higher while others slipped, and that tug-of-war left the Nasdaq grinding out a modest win rather than running away with the day. With a major slate of growth and inflation data on deck for Thursday, traders seemed content to hold their positions without pressing their bets.
The Russell 2000 finished second with a 0.2% advance, cooling off after its strong showing the day before but still holding onto gains. Small-caps had a tougher backdrop to work with, as a sharp jump in crude oil revived concerns about cost pressures that tend to squeeze smaller companies the hardest. Even so, the group managed to stay in positive territory, which suggests the recent breakout still has some support underneath it. Holding gains on a day when energy prices moved against them is a quiet sign that risk appetite hasn't disappeared, even if it has downshifted.
The Dow brought up the rear with a 0.19% gain, though it finished just a hair behind the small-caps in what was essentially a three-way tie. The blue chips finally saw a little more interest after treading water last session, with firmer energy prices offering some support to the old-economy names that make up much of the index. The S&P 500 edged out all three, landing at the head of the pack on a day when every major index posted only modest gains. The VIX dropped 3.77% to close at 16.86, slipping further below the 20 level and showing that fear continues to fade even as traders brace for Thursday's data dump.
Notable Stock Movements
Alphabet was the biggest mover in the Magnificent Seven, jumping 1.34% to lead the group on a day when most of big tech struggled. That's a big turnaround for a name that had been stuck in a losing streak just a couple of sessions ago. Alphabet didn't just snap the slide. It followed through with real conviction while the rest of the group stumbled. When one mega-cap breaks away from the pack like this, it usually means buyers are being picky and moving money into the names they trust most instead of buying the whole sector at once.
The group flipped to a mostly red session, which is a clear change from the broad strength we saw last time out. Alphabet and Amazon were the only names that finished green, while Nvidia, Apple, Microsoft, Tesla, and Meta all closed lower. Meta was the weakest link yet again, falling 1.24% to lead the laggards and stretching a losing run that's getting hard to ignore. At this point, Meta's weakness looks less like random noise and more like traders steadily stepping away from the stock. Tesla's two-day run as group leader came to an end, and that's worth watching since it was the clearest sign of aggressive risk-taking just a session ago. Microsoft stayed on the losing side for a second straight day, while Nvidia and Apple slipped back into the red after joining the rally last time. Amazon holding its gains alongside Alphabet shows that buyers haven't left big tech completely. They've just narrowed their focus.
The broader market stayed positive even with mega-caps losing steam, which is a quietly healthy sign. The Nasdaq rose 0.27%, the Russell 2000 gained 0.2%, and the Dow added 0.19%, so the gains were modest but spread evenly instead of leaning on tech alone. The VIX dropped 3.77% to 16.86, pushing fear even further below the key 20 level, which tells us traders aren't treating the big-tech softness as a warning sign. Now the focus shifts to Thursday, when Advance GDP, the GDP Price Index, and Core PCE all hit at 8:30 AM ET. High-growth names like Tesla and Nvidia are the most sensitive to any surprise on inflation, so a hot Core PCE reading could make their pullback deeper. But if the numbers come in calm and Meta finally finds a floor, big tech could get back in step with the rest of the market and help push stocks higher.
Commodity and Cryptocurrency Updates
Crude oil snapped its two-day losing streak in a big way, jumping 2.57% to close at $102.47. That surge pushed the black gold right back above the $100 mark it had just slipped below, showing that the recent cooling off was more of a breather than a reversal. Crude has rallied well above $70 and far beyond longer-term model expectations, and the geopolitical tensions and supply disruptions behind this run clearly haven't gone away. Buyers wasted no time stepping back in, which tells you the fear premium is still very much alive. With Thursday's Core PCE and GDP Price Index data on deck, energy traders will be watching closely to see how much high fuel costs are showing up in the inflation numbers. A sustained move this far above $70 keeps price pressure in the system and could seriously complicate the Fed's rate path if energy prices stay elevated.
Gold barely budged, inching up 0.06% to close at $4,077. That marks a third straight gain, but this one was more of a pause than a push, as the yellow metal basically held onto its recent progress. Holding steady after a solid prior session is a decent sign, since it shows bulls aren't giving back ground at the first chance. The long-term case remains strong, supported by inflation uncertainty, steady central bank buying, and ongoing geopolitical headlines. Thursday's inflation data could be the spark gold needs for its next leg. If the yellow metal can stay comfortably above $4,000, the path toward a steadier climb stays open. A slide back toward that level, however, would put the bulls' conviction to the test once again.
Bitcoin kept its recovery rolling, gaining 0.88% to close above $81,514. That's a second straight up day, and it pushes the crypto further away from the $80,000 handle it reclaimed in the prior session. Back-to-back green days are exactly what bulls wanted to see, and the move shows buyers are getting more comfortable stepping in. Bitcoin also held up well even as big tech leadership looked shaky, which is an encouraging sign of independent strength. Still, the crypto needs to keep stacking gains to prove this is a real base rather than a short-lived bounce. If Bitcoin can hold above $80,000 through Thursday's macro data, momentum could start building. Losing that level, though, would hand the advantage right back to the sellers.
Treasury Yield Information
The 10-year Treasury yield jumped 1.04% today to close at 5.050, and after two straight sessions of sitting dead still just under the line, the standoff is finally over. It broke the wrong way. Bond sellers stepped in with real conviction and shoved the yield through the 5% level, and that pushes the framework into territory where the pressure on stocks stops being theoretical. This is the move we've been warning about, and now it's here.
Against each threshold, the picture has clearly gotten worse. The 4.5% level where equity valuations start to feel pressure now sits 55 basis points below today's close, and the 4.8% mark that usually kicks off broader selling is 25 basis points back. More importantly, the 10-year is now 5 basis points above the 5% line, which officially flips the serious-risk flag on. The buffer under 5.2%, where the framework calls for a 20% or greater correction, has shrunk to just 15 basis points. That's not much room at all for a market that's been acting like rates don't matter.
Stocks still haven't gotten the message. The Nasdaq added 0.27%, the Russell 2000 gained 0.2%, and the Dow tacked on 0.19%, all modest but positive moves. The VIX actually fell 3.77% to 16.86, its third straight decline, which shows just how calm traders are while the yield climbs into the danger zone. That disconnect is the real story here. On top of that, crude ripped 2.57% higher, which hands bond sellers fresh inflation ammunition and makes it harder for yields to back off on their own.
Thursday brings the next big test, with the Advance GDP, the Advance GDP Price Index, and Core PCE all hitting at 8:30 AM ET. The inflation readings are what matter most for the 10-year. A hot GDP Price Index or Core PCE number could quickly send the yield toward 5.2%, and if that happens, the framework says this complacent equity market is setting up for a serious reckoning. A cooler print could let bond buyers drag the yield back under 5% and buy stocks some breathing room. The key level is now 5% from above, and the 10-year needs to get back under it fast. Until it does, the risk is squarely tilted against equities.
Previous Day’s Forecast Analysis
Heading into Wednesday's Fed decision, our AI model projected SPY's maximum range at $763 to $777, with the Call side dominating an expanding band. That setup pointed to trending price action with intermittent chop, and the forecast carried a bullish bias as long as $765 held. The VIX dropped 4.95% to 17.48 the session before, which reinforced the view that buyers were in control going into the FOMC Statement at 2:00 PM ET and the Press Conference at 2:30 PM ET. The outlook called for a cautious, positioning-driven morning and a livelier afternoon once the Fed spoke, with a clear warning that a Fed surprise could flip the bias quickly.
The key battleground was the $769 to $772 zone, with $769 as first support and $772 as first real resistance. A clean push through $772 was expected to open the door to $775, then $777 at the top of the range, with $780 as a stretch target. On the downside, losing $769 pointed toward $765, the favored dip-buying spot, followed by $762 and $760, the point of last hope for bulls. A break of $760 risked a slide toward $750. The bigger picture stayed healthy, with structural support near $640 keeping the long-term bull trend intact.
The trading strategy called for trimming size to roughly half to two-thirds of normal, keeping stops in the 0.5-0.75% range, and keeping morning trades quick and light until Powell's tone settled. The favored trade was buying a dip at $765 with targets at $769 and $772 and stops below $762. A hold above $772 set up a retest long toward $775 and $777. On the short side, a failed push into $772 targeted $769, $765, and $763, with stops above $775. A decisive loss of $760 shifted the plan to shorting a failed retest toward $750. Longs were allowed slightly more size, but only after the Fed reaction confirmed direction.
Market Performance vs. Forecast
Wednesday's session stayed comfortably inside the model's projected maximum range of $763 to $777, with price never coming close to testing either boundary. SPY opened at $771.43, dipped to a low of $769.25, climbed to a high of $773.35 and closed at $772.39, up 0.35%. The forecast called for a bullish bias as long as $765 held, and the tape never let sellers anywhere near that line. The model does not account for unpredictable external events like the tone of the FOMC Statement or the way Powell frames policy during the Press Conference, and the forecast warned that a Fed surprise could flip the script in minutes. Instead, the decision landed without a shock, and the bullish lean the model identified carried the day. The trending action with intermittent chop showed up as a slow grind higher with some back-and-forth around the key zone.
The $769 to $772 battleground was the key call of the day, and it framed the entire session almost to the penny. The forecast flagged $769 as first support, and the session low printed just above it, so that floor held exactly as mapped. On the upside, $772 was named as first real resistance, and price pushed through it, tagged a high just above it and then settled right on top of that level into the close. The forecast said a break above $772 that held, especially after the 2:00 PM statement, would likely turn the day into a trend higher. Bulls held that line at the bell, which sets up the next test toward $775 heading into the rest of the week.
On the falling market side, the preferred short required a tag of $772 that stalled and rolled over, ideally with a hawkish Fed message sending the VIX back toward 20. The VIX moved the opposite way, so the confirming signal never appeared. Traders who engaged anyway using the tighter stop just above $773 saw risk management protocols protect capital, while the wider stop above $775 was never threatened. On the rising market side, the $765 dip-buy never came into play because sellers couldn't drag price that far. The secondary bull setup was the one that mattered. The forecast said that if bulls broke through $772 and held it, a retest of $772 as support was the trade, and the close right above that level shows buyers defending it. The advice to keep size light into the announcement and let the knee-jerk reaction settle kept disciplined traders out of trouble on a day of narrow, controlled movement.
The VIX dropped 3.77% to 16.86, slipping below the 17 area the forecast named as the bullish confirmation signal while price firmed up. Below-average volume points to a measured, confident advance rather than a frantic Fed-day chase. The hold above $769, the push through $772 and the close on top of it all played out across levels the forecast had already identified. The framework adapts as conditions shift, and Wednesday showed the value of mapping both scenarios before a major catalyst. With the long-term bull trend intact above structural support near $640, it remains a reliable guide for managing risk and capturing opportunity in either direction.
Premarket Analysis Summary
The premarket analysis, posted before the opening bell, set up Wednesday with SPY at $770.68 in a call-dominated tape, with the tone turning positive. Price was sitting just above the $770 round number that had capped every bounce for a week, with the gate directly overhead. The bias hinged on $771, the defining level and the heaviest concentration on the board, sitting right on top of spot. Holding above it would let the rebound grind higher, while losing it would make $770 the battleground. The expected move ran from $762 to $777, and the notes pointed out that a call-dominated tape favors pinning and grinding through levels rather than running them. Upside targets stepped through $772 as the first step, $774 as the next decision point where price should stall, $777 as the cap on the expected move, and $780 as max upside, the ceiling that rejected price two weeks ago. On the downside, $770 was the first level to watch and the line where a clean loss would mean the breakout had failed. Below that sat $768 as the floor of the last two sessions, $765 as the point of last hope and the heaviest support, and $762 as max downside at the bottom of the expected move.
The session played out right in line with the grind-higher script. SPY opened at $771.43, already above the $771 gate. Sellers pushed lower early and briefly cracked $770, but the low printed at $769.25, well above the $768 floor, and buyers quickly took back the round number. From there, price ground through $772 to a high of $773.35, stalling short of the $774 decision point and leaving $777 and $780 untouched. SPY closed at $772.39, up 0.35% on 26.40M shares of below-average volume, finishing just above the first upside step. The VIX dropped 3.77% to 16.86, which showed hedging demand continuing to bleed out. The key takeaway is that the $771 gate held as support and the brief dip under $770 failed to gain traction, which is exactly the pin-and-grind behavior a call-dominated tape tends to produce. Bulls now need to push through $774 to open $777, while $771 and $770 are the levels to defend.
Validation of the Analysis
Wednesday's session followed the premarket map closely, and the level the notes called "the defining level" once again shaped the day. The notes were written with spot at 770.68, and SPY opened at $771.43, just above $771, "the gate, the heaviest concentration on the board." The notes framed the day around one question: "hold above it and the rebound grinds higher, lose it and 770 becomes the battleground." Buyers spent most of the session on the right side of that line, and the result was a third straight day of gains in exactly the slow, grinding style the notes predicted.
The downside levels absorbed the dip with impressive precision. The session low came in at $769.25, slipping briefly under $770, "a major round number and yesterday's prize," but the notes warned specifically about losing it "cleanly," and this was no clean break. Price stayed $1.25 above $768, the level where "the tape begins to come apart," and buyers quickly reclaimed $770. Because $768 never cracked, the warning to "expect a quick trip to 765" never came into play, and neither $765, "our point of last hope," nor the $762 max downside was touched. On the upside, SPY worked up the ladder exactly as mapped. It held the gate, took $772, "the first step," and printed a high of $773.35, stalling $1.65 short of $774, which the notes flagged as "the next decision point where price should want to stall." Neither $777 nor the $780 max upside came into play. SPY closed at $772.39, up 0.35%, finishing 39 cents above that first upside step. The notes also said "a call-dominated tape favors pinning and grinding through the levels rather than running them," and a range of just over four points, sitting well inside the expected move of 762 to 777, proved that call correct. The VIX dropped 3.77% to 16.86, confirming that calm continued to settle into the tape. With volume below average, the advance stayed measured, which matched the grinding character the analysis described.
The trading value came from knowing which dip to buy and where the upside would stall. Traders following the map saw the brief slip under $770 hold well above $768, giving a clean long setup on the reclaim of the round number, with a tight stop under $768 and targets already laid out at $771 and $772. Price reached both. Holding above the gate gave a second entry for traders who wanted confirmation, with risk defined back under $770 and $772 as the natural target, which price cleared before the close. Sellers had a setup too. The push into the $773 area sat just below $774, the expected stall point, offering a defined fade with risk above $774 and a target back toward $772, and price settled right into that zone. The map also kept traders out of bad trades. With $768 holding firm, there was no reason to press shorts toward $765 or $762, and with $774 capping the move, there was no reason to chase longs toward $777 or $780. A session that defended the key floor, held the gate, cleared the first step, and stalled just under the decision point shows how precisely these levels framed the day. Going forward, the battle lines are clear: bulls need to defend $771 and $772 and push through $774 to open the door toward $777, while bears need to drag price back under $770 and $768 to put the three-day rebound in question.
Looking Ahead
Thursday morning brings a heavy stack of data, all landing at once at 8:30 AM ET. Wall Street will still be digesting Wednesday's Fed decision. The headliner is the Advance GDP report, the government's first look at third-quarter economic growth. It arrives alongside the Advance GDP Price Index, a medium-impact gauge of inflation across the whole economy. Core PCE Price Index m/m also drops at the same time, and that one carries extra weight because it's the Fed's preferred inflation measure. Rounding out the morning are weekly Unemployment Claims, a medium-impact read on the health of the job market. Having growth, inflation, and labor data hit the tape at once makes for a crowded and potentially volatile open. A solid GDP number paired with cooler Core PCE would be the sweet spot, signaling a resilient economy with easing price pressures. That combination would likely spark buying in growth and rate-sensitive names. A hot Core PCE print, on the other hand, could quickly reignite worries that inflation is sticking around. That would pressure stocks as investors question how much room the Fed really has to ease. A weak GDP reading or a jump in jobless claims could stir up slowdown fears, especially if it comes with firm inflation numbers.
Expect pre-market futures to react sharply at 8:30 AM ET, and don't be surprised if the first move gets reversed once the regular session opens and traders sort through the details. With multiple reports landing together, the initial reaction often reflects whichever headline number grabs attention first. The full picture takes a little longer to sink in. The interplay with the Fed is key, too. Thursday's data will either back up or challenge whatever message Powell delivered, so watch whether the numbers reinforce or undercut the post-Fed move. Give the market the first 30 minutes after the opening bell to settle before committing new capital. Keep position sizes reasonable and stops in place heading into the release. If the morning direction holds through midday, that's a sign the data is driving real conviction. If it fizzles, traders are likely still weighing the Fed more heavily than the numbers. Either way, Thursday's 8:30 AM ET releases should go a long way toward deciding whether the post-Fed reaction has staying power.
Market Sentiment and Key Levels
Wednesday handed the bulls another win, but it was more of a quiet nudge than a statement. Buyers shook off a shallow early dip and held their ground into the close, yet the session never really caught fire, and the light volume suggests many traders stayed on the sidelines. Breadth was balanced but unexciting. The Nasdaq added 0.27%, the Russell 2000 gained 0.2%, and the Dow rose 0.19%. When all three major averages move together in such a narrow band, it signals steady confidence without much urgency. Mega-cap tech was mostly a drag rather than a driver, so the indexes managed to rise without their usual leadership. Bitcoin picked up some of the slack with a 0.88% gain, while gold barely budged, adding 0.06%. The VIX dropped 3.77% to 16.86, extending its slide and showing that fear keeps easing as traders settle in ahead of Thursday's data. Bulls still hold a slight edge, but softer tech leadership and thin participation mean that edge is fragile heading into a heavy morning of economic reports.
SPY finished just above first support at $772, so the floor is right underneath current price and doesn't leave much cushion. A push through first resistance at $775 opens the door to $777, followed by $780 and $785 if momentum builds. On the downside, losing $772 likely sends SPY toward $770, then $767 and $765. If $765 gives way, there is little to keep price from falling toward $760. The bigger picture remains solid, with the long-term bull trend intact well above structural support at $640. That keeps this a broader dip-buying environment as long as key levels hold. Thursday's projected maximum range runs from $761 to $777, with the Put side dominating in an expanding band that points to trending price action mixed with intermittent chop. That's a notable flip from Wednesday's Call-side tilt and gives bears a modest tailwind. The fireworks start early. The Advance GDP q/q, Advance GDP Price Index q/q, and Core PCE Price Index m/m all hit at 8:30 AM ET, and with growth and inflation data landing at the same moment, expect sharp swings in the first hour of trading. Unemployment Claims arrive at the same time but are unlikely to move the market on their own. A hot inflation reading paired with slowing growth would be the worst mix for stocks and could quickly push SPY through $772. Cooler price data and steady growth could fuel a run toward the top of the range. Traders will also want to see whether big tech can regain its footing, since a rally without leadership from the largest names is harder to sustain. Elevated yields and high oil prices remain in the background as inflation concerns, and both will shape how the market digests Thursday's numbers. With the Put side in control and SPY closing in the upper half of the projected range, we favor shorting rallies near $777. Keep stops tight above $780, let the 8:30 AM data settle before committing, and wait for a decisive break of $772 before pressing any short position lower.
Expected Price Action
Thursday's session brings actionable intelligence generated by our AI model, which projects SPY's maximum range at $761 to $777. With the Put side dominating in an expanding band, the model is calling for trending price action with intermittent chop. The calendar is stacked right out of the gate. The Advance GDP q/q, Advance GDP Price Index q/q, and Core PCE Price Index m/m all hit at 8:30 AM ET, and that trio of growth and inflation data is likely to produce significant volatility, especially in the first hour of trading. Unemployment Claims land at the same time but are unlikely to move the market on their own. Wednesday's quiet grind left SPY finishing in the upper half of Thursday's projected range, which leaves less room overhead than underneath. Paired with the Put-heavy tilt of the band, that gives us a bearish bias heading into Thursday. The VIX dropped 3.77% to 16.86, so fear keeps easing, but complacency right before a data dump can unwind fast.
The key battleground for Thursday is the $772 to $775 zone. SPY is sitting right on top of $772, the model's first support, while $775 is the first real resistance. A clean push through $775 opens the door to $777, which marks the top of the model's range, with $780 and $785 standing as stretch targets if the numbers come in friendly. On the downside, losing $772 likely sends price toward $770, followed by $767 and then $765, the lowest support and the point of last hope for bulls. If $765 gives way, there is little to keep price from falling toward $760. The bigger picture remains healthy, with SPY well above structural support near $640 and the long-term bull trend intact, so this is still a dip-buying market on a broader timeframe.
In the short run, the playbook favors fading strength. A pop into $777 that stalls sets up a short with $772 and $770 as targets. A break below $772 that holds after the 8:30 AM releases likely turns the day into a trend toward $767 and $765. If a soft inflation read pushes SPY decisively through $777, step aside rather than fight it, because $780 can come quickly. Whichever side wins the fight at $772 or $777 once the GDP and PCE numbers hit likely sets the tone heading into Friday.
Trading Strategy
The VIX dropped 3.77% to 16.86, extending its slide as fear keeps draining out of the market. Don't let the calm fool you, though. The Put side now dominates an expanding band, which tilts the odds toward the bears, and Thursday's 8:30 AM ET release of Advance GDP, the GDP Price Index, and Core PCE can light a fuse right at the open. Keep size at roughly half to two-thirds of normal through the first hour, and keep stops in the 0.5-0.75% range from entry. Let the initial data reaction burn off before committing to anything aggressive. A hot inflation print or a growth miss could flip sentiment fast, and the trending action with intermittent chop the model expects means early whipsaws will punish anyone who chases the first candle.
In a falling market scenario, shorting a failed rally into $777 is our favored trade and the best risk-reward setup on the board, since that level marks the projected ceiling for the session. A tag of $777 that stalls and rolls over is the primary trigger, especially if the VIX snaps back toward 18 while price fails to hold gains. A rejection at $775, the first resistance shelf, is a secondary entry for traders who don't get the full pop. The first profit target is $772, with $770 next if sellers keep pressing. Runners can aim for $767 and $765, while the projected low at $761 should be treated as a stretch target on a heavy trend-down day. Stops on shorts belong above $780, and aggressive traders can tighten to just above $778. If price loses $765 with conviction, don't chase the flush. Short a failed retest of $765 from underneath instead, targeting $760 as the final stretch target. Scale out in layers into support, because data-driven drops can reverse just as violently once the dust settles.
In a rising market scenario, buying a dip at $767 to $765 is the cleaner long setup. A pullback that tags that zone and holds is the primary trigger, particularly if the VIX keeps slipping toward 16 while price firms up. The initial profit target is $770, with $772 in play if buyers seize control. Stops on longs belong below $761, just under the projected low. If bulls punch through $775 and hold it, buy a clean retest of $775 as support, targeting $777 as a hard ceiling for the session. Anything beyond that toward $780 should be treated as bonus territory for runners only. With puts in charge of the band and the model favoring shorts near $777, longs should carry lighter size than shorts until the data confirms direction. The long-term bull trend remains intact above $640, so deeper pullbacks will likely draw buyers. For now, the bears have a slight edge as long as $777 caps the upside.
Model’s Projected Range
SPY's projected maximum range for Thursday is $761 to $777, with the Put side dominating in an expanding band that suggests trending price action with intermittent chop. Thursday, October 29 is loaded with the Advance GDP q/q, Advance GDP Price Index q/q, and Core PCE Price Index m/m all hitting at 8:30 AM ET, which are likely to produce significant volatility particularly in the first hour of trading, while Unemployment Claims at the same time are unlikely to move the market on their own. SPY closed at $772.39, up 0.35%, after opening at $771.43 and working in a fairly tight session that dipped to a low of $769.25 before pushing to a high of $773.35. SPY is trading near our model's first support at $772, and with GDP and inflation data landing back to back, the macro picture on growth and prices is the catalyst that could decide which way this range breaks. If price can clear first resistance at $775, the door opens for a run toward $777, but if first support at $772 gives way, look for a slide toward $770, and if the lowest support at $765 breaks 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 $775, $777, $780, $785, while support rests at $772, $770, $767, $765. We favor shorting rallies near $777 with SPY closing in the upper half of the projected range. Bitcoin showed strength, gaining 0.88% to close above $81,514, while the MAG stocks were mostly red with Meta leading the losers at -1.24% and Alphabet bucking the trend with a 1.34% gain, a mixed picture where crypto strength helped offset softness in big tech leadership. The VIX closed at 16.86, down 3.77%, suggesting fear continues to ease modestly as traders settle in ahead of Thursday's data dump. SPY continues to hold above the lower boundary of its broader uptrend, with structural support near $640.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended Wednesday in a Bullish Trending Market State with SPY closing at $772.39. Because SPY closed below the MSI range, MSI support at $774.25 now becomes resistance for Thursday. Extended targets were printing above at the close. The MSI rescaled higher overnight and held a narrow bullish state with extended targets visible above the range in premarket as it stepped higher. At the open SPY retested MSI support and broke below it briefly, then rallied back through it and up to MSI resistance. That is our favorite setup. It took all morning, but the target was reached. Before the FOMC decision SPY bounced around inside the MSI until the Fed announced it would hold rates steady. The MSI then rescaled several times both higher and lower, with too much volatility to trade. Extended targets printed above during the PM session and again into the close. Late in the day price spiked on headlines about a possible end to the Iran war, and the MSI rescaled higher into a moderate $1.50 Bullish Trending state.
For Thursday the MSI forecast is a strong continuation higher, with the bulls keeping control and extended targets above suggesting upside momentum will persist. With GDP, PCE, and the Microsoft and Google earnings reactions all landing before or at the open, outside forces will likely drive price early. Expect some chop around current levels before buyers try to trend once the data is out. MSI support is $774.25 with resistance at $775.75.
Key Levels and Market Movements:
Tuesday we stated, "Bulls want to see overnight price hold above $769.37 and stay near the $769.71 close," and added, "From there they need to push through $771.07 and Tuesday's $771.13 high with the MSI rescaling higher and extended targets printing above, which would open the door to fresh highs once the Fed is out of the way," while also noting, "Keep size light into the 2:00 PM ET statement and let the post-FOMC reaction and the MSI confirm direction before pressing." The bulls delivered on that script. The MSI rescaled higher overnight with extended targets printing above, and SPY opened at $771.43, already above $771.07 and Tuesday's $771.13 high. Buyers didn't get a straight line, though. SPY dipped right away to retest MSI support and slipped below it briefly. Sellers couldn't hold it under, and price climbed back through support and spent the morning grinding up to MSI resistance. Into the Fed, SPY drifted back and forth inside the MSI range. When the hold-steady decision hit, the MSI rescaled sharply in both directions. That was exactly the kind of tape we warned about, and it was time to keep size light or sit on your hands. The session low came at $769.25, just a hair under Tuesday's $769.37 support, and the session high printed at $773.35 for fresh highs. The late spike on the Iran headlines sent the MSI rescaling higher with extended targets printing above into the close, and SPY settled at $772.39.
Two trades followed. The first was buying the failed breakdown below MSI support at the open once SPY reclaimed the level from below, targeting MSI resistance, which was reached by late morning. The second was buying the next pullback into MSI support during the pre-FOMC drift, targeting MSI resistance again, which was reached ahead of the announcement. After 2:00 PM ET the rescaling was too erratic to justify new entries, and stepping aside was the right call. At minimum it was a 2-for-2 session for traders following the framework.
SPY gained 0.35% on volume of 26.40 million shares, still below average, so participation stayed light even with the Fed in the rearview. The VIX dropped 3.77% to 16.86, another step lower in fear. It was a volatile but readable day 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 heavy economic data with the Advance GDP q/q, Advance GDP Price Index q/q, Core PCE Price Index m/m, and Unemployment Claims all at 8:30 AM ET which can introduce significant volatility, so traders should be ready to trade what they see rather than predict. Traders will also be digesting Microsoft and Google earnings from Wednesday night, so outside forces will likely matter more than anything else early. The MSI closed in a moderate $1.50 Bullish Trending state with extended targets printing above, which points to a strong continuation higher on Thursday. SPY closed below the range, so $774.25 now acts as resistance until buyers reclaim it, with $775.75 above that.
Bulls want to see overnight price hold near the $772.39 close and stay above Wednesday's $769.25 low. From there they need to reclaim $774.25 with extended targets still printing above, which would set up our favorite move. That is a push back through support-turned-resistance and on to $775.75, with room for fresh highs beyond Wednesday's $773.35 high if the MSI keeps rescaling higher. Bears want to see $774.25 cap every rally and the $772.39 close give way, with the MSI rescaling to a bearish state and extended targets printing below. That would press SPY back toward Wednesday's $769.25 low, the 50 DMA near $767.73, and the $765 base beneath it.
In a Bullish Trending state with moderate width, bulls have control and the bias favors longs. Expect some chop around current levels ahead of the 8:30 AM ET releases. Once the data hits, the cleanest long is a reclaim of $774.25 from below, targeting $775.75. Once SPY is back inside the range, any pullback to $774.25 is a buying opportunity targeting $775.75. If the MSI rescales higher with extended targets printing above, buy dips into the new support while targeting the upper line. A failed breakout above $775.75 that slips back under could offer a short back toward $774.25, but the bias favors longs until the MSI shifts. If SPY is rejected at $774.25 and extended targets flip to printing below, step aside on longs and look to sell rallies toward $769.25 and $767.73. Keep size light right at 8:30 AM ET and let the first reaction settle before pressing.
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 $773 to $795 and higher strike Calls, indicating the Dealers' belief that the market is balanced at current prices and continues to await an external catalyst to move price. They are not buying ATM Calls, nor are they selling ATM Puts, which tells us the smart money still sees no clear edge in either direction. The ceiling for Thursday appears to be $780. To the downside, Dealers are buying $772 to $710 and lower strike Puts in a 3:1 ratio to the Calls they're selling, displaying continued concern that prices could move lower. There is a Call wall below at $770 which will act as support, with a Put wall below at $765 that is unlikely to hold as support should price reach that level. Below $768 is bearish and above $772 is bullish, with chop and traps in between. Gamma is sitting right at the border between positive and negative, so rallies are likely to be sold, while pullbacks below $770 may pick up steam and head lower. Dealer positioning is unchanged at neutral/slightly bullish.
Looking Ahead to Next Friday:
Dealers are selling SPY $773 to $805 and higher strike Calls, indicating the Dealers' belief that the market is balanced and awaiting an external catalyst to move price this week. They are not buying ATM Calls, nor are they selling ATM Puts, so the smart money is staying patient until something forces its hand. The ceiling for the week appears to be $783. To the downside, Dealers are buying $772 to $695 and lower strike Puts in a 4:1 ratio to the Calls they're selling, showing they remain heavily hedged and are still guarding against a deeper pullback. Into the end of the week, there is a Call wall below at $770 which will provide support, with a Put wall lower at $765 that is unlikely to hold as support should price reach that level. Below $767 is bearish and above $772 is bullish, with chop and traps in between. Gamma is slightly negative, so rallies are likely to be sold, while pullbacks below $767 may pick up steam and head lower. For the week Dealer positioning is unchanged at 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
Short rallies near $777, targeting $772 and $770, with stops above $780.
With GDP and Core PCE hitting at 8:30 AM ET, keep size light and 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!
