Market Insights: Wednesday, October 29th, 2025

Market Overview

Stocks closed mixed on Wednesday after the Federal Reserve delivered its second rate cut of the year but offered no clear signal about whether more easing is coming in December. The S&P 500 finished flat, while the Dow dipped 0.15%. The Nasdaq rose 0.55%, notching another all-time high as Nvidia rallied nearly 3% and reached a record-breaking $5 trillion valuation. The rally came as President Trump signaled he may raise Nvidia’s AI chip export restrictions with Chinese President Xi during Thursday’s high-profile meeting. That boosted optimism that pressure on the company’s China sales may ease.

While markets initially welcomed the Fed’s quarter-point cut, sentiment cooled after Chair Jerome Powell said a December cut is “far from a foregone conclusion,” citing data uncertainty stemming from the government shutdown. Powell’s cautious tone introduced fresh ambiguity and drove a spike in Treasury yields late in the session. The central bank’s internal divisions were also on display, with Governor Stephen Miran favoring a larger half-point cut and Kansas City Fed President Jeff Schmid voting to hold rates steady.

Investors are now turning their attention to a wave of tech earnings expected to hit after the close, with Alphabet, Meta, and Microsoft reporting today and Apple and Amazon due Thursday. Markets are bracing for significant post-market volatility. With geopolitical developments, earnings catalysts, and rate policy all converging, traders are preparing for a turbulent finish to the week.

SPY Performance

SPY opened at $688.74, climbed to a high of $688.70 in early trading, and then dipped to a session low of $682.88 before closing at $687.31, up just 0.04%. Trading volume was 78.71 million shares, slightly above average, reflecting heightened activity around the FOMC decision. Despite midday volatility, bulls defended key support at $683, and SPY closed solidly above the $685 level that continues to define near-term momentum.

Major Indices Performance

The Nasdaq led with a 0.55% gain as Nvidia carried the sector higher, while the S&P 500 closed virtually unchanged. The Dow slipped 0.15%, and the Russell 2000 underperformed again, falling 0.93% as small-cap weakness continues. Market strength remains concentrated in large-cap tech, with chip stocks and megacaps driving index gains.

Notable Stock Movements

Nvidia rose nearly 3% to close at a record, briefly pushing its market cap over $5 trillion amid optimism around easing restrictions and continued AI enthusiasm. Most of the Magnificent Seven traded higher, except Netflix, which dipped 0.19%. Microsoft, Meta, and Alphabet all saw gains ahead of their post-close earnings, while Apple and Amazon hovered near recent highs in anticipation of Thursday’s reports.

Commodity and Cryptocurrency Updates

Crude oil rose 0.33% to $60.35, finally breaking the $60 level our model had been forecasting for months. While this confirms a key level, the broader trend still suggests crude may fall further toward $50 although this view is starting to wane and its possible crude actually rallies as long as it stays above $56. Gold declined 0.76% to $3,952 as risk appetite returned, and Bitcoin dropped 1.95% to close just above $110,600, reflecting cooling sentiment in crypto markets.

Treasury Yield Information

The 10-year Treasury yield jumped 2.26% to 4.073% following Powell’s hawkish tone. While still below danger zones, a sustained move above 4.5% would pressure equities. At 5.2%, a 20% correction is likely. Traders are closely monitoring yields as bond market volatility picks up again.

Previous Day’s Forecast Analysis

Tuesday’s forecast expected SPY to range between $680 and $694.25, with a bias above $685. Resistance was expected at $689 and $692, and support at $683 and $681. SPY opened just above $688, quickly tested $689, and reversed lower to $682.88 before bouncing to close at $687.31. As projected, $683 acted as major support and $689 served as resistance. Despite Powell’s tone shift, the model correctly forecasted intraday levels and offered actionable clarity.

Market Performance vs. Forecast

SPY’s movement validated the model, testing both upper and lower ranges. Price respected $683 support perfectly, reinforcing our bias and structure. Though the day closed flat, traders saw excellent opportunities to fade extreme levels with confidence. Price action remained directional and reactive to macro drivers, with the roadmap continuing to guide execution.

Premarket Analysis Summary

Wednesday’s premarket expected consolidation near $687.35 with limited upside to $691.80 and noted risk-off bias below $689.35. This played out precisely, with SPY failing at $689, dropping toward $683, and bouncing post-FOMC. The call to fade strength below $689 proved prescient, and the model’s restraint on upside targets helped avoid whipsawing.

Validation of the Analysis

Once again, SPY traded cleanly within projected levels. The roadmap and MSI accurately described the session’s character — coiled early, volatile midday, and flat late. The forecast respected both sides of the range while offering a clear framework for reaction to the Fed.

Looking Ahead

SPY’s projected range for Thursday sits between $680 and $692. Thursday brings GDP data and follow-through from today’s earnings and Fed decision. Resistance levels are $689, $690, and $695, while support lies at $685, $683, $680, and $677. Bulls must defend $682 to retain control. A break below invites a gap fill to $680 or deeper, but buyers are likely to step in quickly unless macro headlines surprise to the downside.

Market Sentiment and Key Levels

SPY closed at $687.39, holding well above the bull/bear dividing line of $670. The VIX rose 3.05% to 16.92, reflecting slight unease ahead of Thursday’s headlines. The path of least resistance remains higher, but Wednesday’s pause suggests some consolidation may follow. Still, until $682 breaks, bulls remain in control.

Expected Price Action

Thursday is poised to be volatile as GDP data and key earnings collide. If SPY clears $689, it could test $690 and $695 quickly. A loss of $683 targets $680, with $677 and $676 below that. Bulls need to defend dips and build momentum above $685, while bears require a close below $681 to regain short-term control.

Trading Strategy

Stay long above $685 with upside targets at $689 and $692. Avoid chasing strength near $690 unless supported by earnings headlines. If SPY rejects $689 again, consider fading toward $683 with stops tight. Use MSI to guide intraday action, especially around earnings or economic releases.

Model’s Projected Range

SPY’s projected maximum range for Thursday sits between $676 and $695.25, with the Put side dominating in a widening band that suggests trending price action mixed with brief periods of chop. GDP data hits tomorrow, and tonight’s slew of megacap earnings along with today’s FOMC statement will heavily influence direction. While the Fed cut rates by 25 basis points, Powell’s caution that a December cut isn’t guaranteed briefly rattled markets. Still, SPY finished nearly flat at $687.39, down just 0.05%, as dip buyers once again stepped in at $683, a major support level identified in yesterday’s report. Tomorrow’s tariff discussions between the U.S. and China, combined with earnings from major tech names, could easily push SPY to fresh highs if the news is positive. With SPY closing well above the $670 bull/bear dividing line, bullish control remains intact. Elevated volume suggests some froth may need to unwind, yet momentum continues to favor the bulls, making fading this strength a risky proposition. The first meaningful downside test arrives only if $682 breaks; below that, Tuesday’s lows or a gap fill near $680 come into play, where buyers are expected to defend aggressively. Holding above $685 keeps momentum alive, targeting $690 and $695 next, with minimal resistance above $692. While FOMC volatility was muted until Powell’s comments, the hawkish tone introduced short-term uncertainty, leaving tomorrow’s path dependent on earnings, China headlines, and GDP data. Absent a catalyst, resistance for Thursday sits at $689, $690, and $695, with support at $685, $683, $680, and $677. Crypto fell today while most Mag stocks rallied, showing a split in risk sentiment. As we’ve emphasized for weeks, until sustained weakness develops in key leaders and crypto, the broader trend remains higher. Persistent softness in those assets could still trigger the 10–15% correction we’ve forecast, though with each passing week that probability shifts toward early 2026. The bulls remain firmly in control, though today’s hesitation may give bears hope for a short-term pullback. The VIX rose 3.05% to 16.92, reflecting mild jitters but remaining well below the 23 threshold for market stress. SPY closed mid-channel within its April bull trend, a structure that continues to support further upside momentum. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the session in a Bullish Trending Market State, with SPY closing near MSI support. Extended targets appeared only sporadically during the decline and were absent into the close, showing limited downside momentum. Overnight, SPY reached a new intraday all-time high with extended targets active for much of the session, though the MSI narrowed to a bullish state premarket and held until just before FOMC, when it briefly shifted to a ranging and then a bearish state. Each rescale lower remained narrow and lacked extended targets, indicating the herd was not actively participating in the selloff. Buyers stepped in aggressively at MSI support, driving price higher into the afternoon. The MSI then oscillated between states before turning bullish again in the final minutes of trading. For Thursday, the MSI is forecasting lower prices with potential tests of both ends of Wednesday’s range. Given the wide projected range, traders should expect the MSI to rescale into the open, providing key directional guidance for the session ahead. MSI support is $687.50 with resistance at $688.52.
Key Levels and Market Movements:
On Tuesday we wrote, “Expect mostly sideways to slightly higher price action early,” and noted, “once the announcement hits, be ready for anything as moves of $30 in either direction,” while also stating, “SPY is unlikely to move meaningfully above $690, yet the bulls remain firmly in control and will look to defend $685 overnight to sustain upward momentum, while the bears need $683 and then $681 to fail to push price below $680.” With this context, and with the MSI in a narrow bullish state at the open and extended targets printing above, we waited for a failed breakout and for extended targets to stop printing before taking a short at $689.35, setting T1 at MSI support at $687.60. It took nearly the entire morning to reach that level, but once T1 was hit, we set T2 slightly lower at the premarket level of $687.35. Heading into FOMC, however, we chose to flatten our position given the uncertainty of the reaction and exited in full at MSI support around 1:30 pm. At 2 pm, SPY spiked on the FOMC release, only to reverse sharply in a textbook failed breakout, giving us a new short entry at MSI resistance at $688.48 with T1 again at $687.35. As Powell began speaking, T1 was hit almost immediately, followed by a rapid selloff that drove price to our T2 target at $685. The MSI then began rescaling lower, so we held briefly, waiting for a signal to exit. That came on a perfect failed breakdown at $683.50, and while a reversal long was tempting, with two strong winning trades in hand, we opted to protect profits, closed the short, and called it a day. Another disciplined session, two for two, including one major winner 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 prove its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
Thursday could move sharply in either direction depending on earnings, tariff headlines, and GDP data, so it’s critical to trade what you see and stay flexible. $690 remains major resistance, and if it breaks cleanly, new all-time highs are likely. On the downside, $683 is key support where dip buyers are expected to defend; if it fails, the bears will target $680 and then $677. Our lean remains to trade with the prevailing bull trend buying the first tests of lower levels. But we’re also open to selling $690 on a failed breakout if momentum stalls. External catalysts will likely dictate the day’s flow, so use the MSI as your guide to stay aligned with real-time market state shifts. With VIX around 16, the bulls have reinforced a clear “risk-on” environment and remain firmly in control, focused on defending support. The bears need a decisive break below $680 to regain any real traction. With SPY closing well above $680, bullish momentum dominates, so we continue to favor dip buys while staying nimble and ready for volatility sparked by earnings or macro news. The key level for the broader bull market remains $640, and only a decisive break below that threshold would hand full control to the bears. Failed breakouts and failed breakdowns remain the highest-probability setups in this environment, and with major data releases hitting in the premarket, traders should stay flexible, avoid entries during Ranging Market States, and ensure full alignment with the MSI before acting. 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 $687 to $705 and higher strike Calls implying the Dealers’ belief that prices may stall near today’s levels. The ceiling for Thursday appears to be $695. To the downside, Dealers are buying $686 to $600 and lower strike Puts in a 3:1 ratio to the Calls they’re selling displaying some concern that prices could move lower. Dealer positioning has changed from neutral to slightly bearish/neutral.
Looking Ahead to Friday:
Dealers are selling SPY $687 to $705 and higher strike Calls implying the Dealers’ belief that prices may stall near today’s levels. The ceiling for this week appears to be $696. To the downside, Dealers are buying $686 to $600 and lower strike Puts in a 5:1 ratio to the Calls they’re selling, reflecting a market that is hedged heavily given its’ lofty levels. This is not necessarily bearish, but instead with options relatively inexpensive, Dealers are fully hedged for what may come. We suggest any long book do the same. For the week Dealer positioning is unchanged from bearish to bearish but again Dealers have added protection as SPY makes new highs daily. 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

Trade the roadmap. Longs are favored above $685 with resistance at $689 and $692. Stay cautious during earnings and GDP releases. Fade extremes if structure aligns and MSI confirms. Bears must wait for a clean break of $681 to gain traction. Until then, bulls remain firmly in charge.

Good luck and good trading!