Market Insights: Friday, October 30th, 2026
Market Overview
Stocks got hammered Friday on the last trading day of the month as earnings from Amazon (AMZN) and Alphabet (GOOG, GOOGL) reignited fears about how much cash Big Tech is pouring into its AI ambitions. The Nasdaq tumbled 2.8% early as the tech-driven selling picked up steam, while the Dow fell 1%, or over 600 points, and the S&P 500 dropped 1.8%. Things got worse in the afternoon as the technology sector (XLK) took another hit and stocks sank to session lows. The Nasdaq was down 3.3% and headed for its worst day since June, and the S&P 500 was off 2.1%. That marked a second straight losing session, and the Nasdaq is on track for its worst month since March 2025. Amazon and Alphabet both posted rare earnings misses, which raised fresh doubts about whether the AI boom can last. Amazon shares fell 2%, and Alphabet kept shedding market value after suffering its worst day in over 20 years. Intel (INTC) took an even bigger beating, dropping 30% in premarket trading after its fourth-quarter outlook came up short. Energy was the rare bright spot. ExxonMobil (XOM) and Chevron (CVX) briefly touched record highs after both oil majors said wider refining margins tied to the war in the Middle East boosted their earnings, and AstraZeneca (AZN) delivered an earnings beat before the opening bell. Rebounding oil prices added more pressure on the broader market, with Brent crude futures rising to $113 per barrel and WTI crude reaching $104. The Fed backdrop isn't helping either. St. Louis Fed president Alberto Musalem said inflation is too high and broad-based and that the Fed needs to act "soon" or higher prices will stick around. Richmond Fed president Tom Barkin also suggested more hikes are needed to fight inflation in the face of strong demand, and the only real question is how much. Those comments come after this week's split decision to hold rates steady even as inflation climbed, followed a day later by a hotter September reading on the Fed's preferred inflation gauge that locked in expectations for a December rate hike.
Crypto had a rough day too. Bitcoin (BTC-USD) tumbled more than 5% and kept sliding after a $6.3 billion hack of cryptocurrency exchange Binance, the largest heist of its kind in history. Blockchain analytics firm Chainalysis said investigators spotted thousands of transactions in a short window as the hackers moved stolen funds across blockchains, pointing to automation designed to hide the money trail. "Our investigators are observing never-seen-before laundering patterns with the stolen funds from the Binance exploit," the firm said on social media. That has some wondering whether artificial intelligence is helping the attackers cover their tracks, but it's too early to say. Automated crypto transactions aren't new, and investigators haven't determined whether AI played any role in the attack itself. Meanwhile, SpaceX (SPCX) showed that rising price targets don't guarantee a rising stock. Analysts spent last week bumping up their targets while investors spent it selling. Shares fell about 5% Friday, extending a slide that has wiped out more than $400 billion in market value since the Oct. 6 high, when the company was worth more than $2.3 trillion. It's now worth less than $2 trillion. The drop has erased the stock's post-earnings pop, too. SpaceX rose about 8% on Oct. 21 after third-quarter results beat Wall Street's forecasts, and it has since lost more than $250 billion in value. Then the lockup expired, freeing about 1.3 billion shares to sell on Oct. 22. The stock held above $140 in the sessions that followed but broke below that level Friday. A close below $135 would be its lowest since Aug. 24, and the next floor sits near the summer low of about $107. To flip the script, bulls first need to reclaim roughly $147, which would push SpaceX back above $2 trillion, and then its $150 first-day open.
SPY Performance
SPY opened at $761.38, gapping down hard from yesterday's close of $769.49 and starting the session below both $766.62 and $764.44, the two levels we said would hand control to the bears. That crack we flagged yesterday turned into a full break before the opening bell even rang. Buyers never got a chance to fight back. SPY managed a session high of just $761.46, barely above its open, and that was the best the bulls could do all day. Sellers took over from the first minutes and drove SPY steadily lower to a session low of $750.36. Buyers finally showed up near the lows and nudged SPY off the bottom, but the bounce was weak. SPY finished at $755.78, well below its open.
SPY lost 1.77%, its worst day in this stretch by a wide margin. More importantly, the streak of four straight sessions closing above the open is over. Yesterday the overnight gap did the damage while buyers controlled regular hours. Today sellers won both the gap and the trading day. Volume confirms this was serious selling. Turnover exploded to 65.08 million shares, higher than average and more than double yesterday's total. Yesterday's warning sign of rising volume on a down day just became a full alarm. Big money was heading for the exits, not just trimming positions. The VIX jumped 16.22% to close at 19.99, ending its four-day decline and moving right up against the 20 mark. Yesterday traders shrugged off the pullback and skipped buying protection. Today they rushed to buy it. That shift from calm to concern in a single session is a big change in market mood.
The bears are now firmly in the driver's seat. Today's low of $750.36 is the new line in the sand, and a close beneath it would signal that sellers aren't finished yet. On the upside, SPY first needs to reclaim today's high of $761.46 just to show that buyers have stopped the bleeding. After that, $764.44 and $766.62 have flipped from support to resistance. The bulls would need a close back above both before anyone can call this a dip worth buying. The small bounce off the lows offers a sliver of hope, but heavy volume, a close near the bottom of the range, and a VIX knocking on 20 all lean bearish. Expect more volatility in the sessions ahead. Yesterday the trend showed its first real crack, and today that crack split wide open.
Major Indices Performance
The Dow held up best on a rough day, sliding 1.09% as the blue chips once again proved to be the safest place to hide. That's still a meaningful loss, but the index's heavy mix of industrials, financials, and defensive names kept it well clear of the carnage in tech. Investors clearly weren't in a buying mood, but the old-economy names avoided the kind of forced selling that hammered growth stocks. When the Dow is the "winner" on a down day, it tells you money was playing defense rather than chasing anything.
The Russell 2000 finished second with a 1.86% drop, snapping its recent run of leadership in a hurry. Last session's rotation into small-caps looked promising, but this time there was no escaping the broad selling pressure. A slight dip in borrowing costs should have offered some support, but it wasn't nearly enough to offset the risk-off mood. Crude pushed higher again, reviving one of the headwinds that tends to weigh on smaller, domestically focused companies with thinner margins. Small-caps getting caught in the downdraft shows this wasn't just a tech story but a market-wide retreat.
The Nasdaq took the worst beating with a brutal 2.86% decline, its second straight painful session. Another steep drop in one of the most heavily weighted chipmakers dragged the index lower, and widespread weakness across the megacap group left nothing to cushion the fall. When the market's biggest leaders all sell off together, the Nasdaq feels it more than anyone, and that's exactly what played out here. The S&P 500 landed between the Dow and the Russell 2000 as tech weakness dragged the broader index down. The VIX jumped 16.22% to close at 19.99, a sharp spike that signals real fear creeping back in after last session's calmer rotation. With no economic news on Monday's calendar, technicals and headlines will drive the next move.
Notable Stock Movements
Nvidia was the biggest mover in the Magnificent Seven, and it was another rough one for big tech. The chipmaker dropped 4.22% to lead the group's losses, taking over the spot Alphabet held just one session ago. That's a heavy hit for the stock that has carried so much of the AI trade on its back. When Nvidia sells off this hard, it pulls down the confidence of every investor betting on the AI boom, not just those who own the stock. It shows sellers aren't picking off one weak name at a time anymore. They're going after the leaders, and that is a different kind of pressure.
The group finished mostly red for a third straight session, and this time the damage looked broader. In the last session, a couple of names managed to hold up and offered some hope that buyers were stepping in on select stocks. That support didn't carry through today, as Nvidia's slide set the tone and the rest of the group struggled to find footing. Meta's comeback from last time will need more than one strong day to prove it was a real bottom, and traders will be watching whether the steadier names can hold up at all when the leader is getting hit this hard. Three straight days of mostly red tells us big tech is losing its grip on market leadership, at least for now.
The broader market told a very different story than the last session's rotation. The Nasdaq sank 2.86% as tech led the way lower, the Dow fell 1.09%, and the Russell 2000 dropped 1.86%. Small caps had been the safe spot when money rotated out of mega-caps, but today there was nowhere to hide. That points to real risk-off selling instead of a simple reshuffle. The VIX jumped 16.22% to 19.99, sitting right at the key 20 level that separates normal jitters from real fear. Monday brings no economic news, so the market will trade on technicals and headlines. If Nvidia can find buyers early in the week, it could help steady the whole group. But if the selling in the chip leader keeps going, the VIX could break above 20 and big tech could be in for a longer stretch of pain.
Commodity and Cryptocurrency Updates
Crude oil pushed higher, gaining 1.07% to close at $103.09. After the prior session's quiet consolidation, the black gold found fresh buyers and extended its hold above $100 even as risk assets came under heavy pressure. Crude has rallied well above $70 and continues to defy longer-term model expectations, with geopolitical tensions and supply disruptions still driving the trade. The fact that oil climbed on a day when fear swept through the broader market shows the supply concerns are carrying more weight than any worries about slowing demand. Monday brings no economic news, so energy traders will be watching headlines for any shift in the supply picture. A sustained move this far above $70 keeps inflationary pressure front and center and could seriously complicate Fed policy if energy prices stay elevated.
Gold took a hard hit, tumbling 3.46% to close at $3,892. That's the yellow metal's second straight loss, and this one did real damage, slicing cleanly through the key $4,000 level that bulls needed to defend. A drop this sharp on a risk-off day suggests some traders were selling winners to raise cash, which often happens when markets get shaken. The long-term case still has support from inflation uncertainty, steady central bank buying, and ongoing geopolitical tensions, but momentum has clearly shifted toward the sellers for now. Bulls need to reclaim $4,000 quickly to show this was a flush rather than the start of a deeper correction. If gold can't get back above that level, the rally's strength will remain in question and further downside pressure is likely.
Bitcoin slid again, falling 1.24% to close below $76,811. That marks a second straight decline and, more importantly, a break below the $80,000 psychological level that had been anchoring the base-building story. The selloff in tech leadership dragged crypto down with it, reinforcing that Bitcoin still trades like a risk asset when fear picks up. Losing $80,000 hands the advantage to the sellers, and the recent bounce now looks more like a short-lived relief rally than a true recovery. With no economic news on Monday's calendar, Bitcoin will likely take its cues from overall risk appetite. Bulls need to push the crypto back above $80,000 to repair the damage, while continued weakness would open the door to a deeper pullback.
Treasury Yield Information
The 10-year Treasury yield fell 1.20% today to close at 4.930, a second straight decline that pushed it further below the 5% line it broke just days ago. That's real progress, and it's the kind of follow-through bond bulls needed after yesterday's barely-there dip under 5%. But don't mistake this for an all-clear. The 10-year is still sitting deep in territory that has historically spelled trouble for stocks, and today proved that falling yields alone can't hold this market up.
Against each threshold, the picture improved again but remains uncomfortable. The 4.5% level where equity valuations start feeling the squeeze is still 43 basis points below today's close, and the 4.8% mark that usually sets off broader selling sits just 13 basis points away. The serious-risk flag at 5% now has 7 basis points of cushion instead of 1, which is better but still thin. The gap to 5.2%, where the framework calls for a 20% or greater correction, stretched to 27 basis points, giving the market a bit more room to breathe on the worst-case scenario.
What stands out is how badly stocks ignored the rate relief for a second day in a row. The Nasdaq dropped 2.86%, the Dow lost 1.09%, and even the Russell 2000 fell 1.86% after bouncing yesterday on easing yields. When small caps sell off alongside falling rates, that tells you this isn't a rates story anymore. It looks more like a flight to safety, with money rushing into Treasuries and driving yields down because investors are nervous, not because inflation fears are fading. The VIX backs that up, jumping 16.22% to 19.99 and snapping its losing streak in a big way. Gold sliding 3.46% to $3,892 suggests some traders were forced to raise cash wherever they could. Meanwhile, crude climbed 1.07% to $103.09, and energy prices that high keep inflation pressure alive, which limits how far bond buyers can realistically push yields down.
Monday brings no economic data, so the 10-year will trade on headlines and whatever risk appetite looks like after today's selloff. If fear keeps building, safe-haven buying could drag the yield toward 4.8%, which would take serious pressure off equity valuations once the panic cools. If stocks stabilize and that safety bid unwinds, the yield could snap back toward 5% quickly, especially with oil staying elevated. The level to watch is now 4.8%. A close below it would be the first real sign rates are easing their grip on this market, but until then, the 10-year remains a major headwind even on days when it's falling.
Previous Day’s Forecast Analysis
Heading into Friday, our AI model projected SPY's maximum range at $757 to $771, with the Put side dominating in an expanding band. That setup pointed to trending price action with intermittent chop. Because Thursday's slow drift had left SPY sitting near the very top of that projected range, with little room overhead and plenty underneath, the forecast carried a bearish bias. The 8:30 AM ET Employment Cost Index q/q release was flagged as a medium-impact catalyst that could stir up early movement if wage pressures surprised. The VIX had dropped 2.42% to 16.50, a sign of cooling fear, but the warning was that a calm tape with sellers in control can turn quickly once support cracks.
The key battleground was the $768 to $770 zone. $770 was the first resistance and the gate bulls needed to clear, with a break targeting $771 and stretch targets at $775 and $780. On the downside, losing $768 was expected to send price toward $766, then $760 and $758, the last line of defense for bulls. A break of $758 opened the door to $750. The bigger picture stayed healthy, with structural support near $640 and the long-term bull trend intact.
The favored trade was shorting a failed rally into $770 to $771. Targets were $768 and $766, runners aimed at $760 and $758, and $757 served as a stretch target. Stops belonged above $775, or just above $772 for aggressive traders. A clean loss of $758 called for shorting a failed retest from underneath toward $750. On the long side, buying a dip that held at $768 to $766 targeted $770 and $771, with stops below $760. A hold above $771 set up a retest buy aimed at $775, and $780 was reserved for runners only. Position size was to stay at half to two-thirds of normal through the first hour, with stops of 0.5-0.75%. Longs were to carry lighter size than shorts, since the bears held a slight edge as long as $770 capped the upside.
Market Performance vs. Forecast
Friday's session opened inside the model's projected maximum range of $757 to $771 before external catalysts drove price action beyond the lower boundary. SPY opened at $761.38, reached a high of just $761.46, slid to a low of $750.36 and closed at $755.78, down 1.77%. The forecast called for a bearish bias, and the tape delivered it decisively. Price opened well below the $768 to $770 battleground and never came close to reclaiming it. The model does not account for unpredictable external events, including how the market interprets the 8:30 AM ET Employment Cost Index release, and the forecast warned that a calm tape with sellers in control can turn quickly once support cracks. That is exactly what unfolded, as selling pressure intensified enough to produce a move that exceeded the model's base case scenario.
The downside roadmap proved accurate. The forecast said losing $768 would likely send price toward $766, followed by $760 and then $758, the point of last hope for bulls. SPY opened below both $768 and $766, and the session high stalled barely above $761, so bulls never mounted a real challenge. Sellers pushed through $760, $758 and the projected low at $757. The forecast then warned that if $758 gave way, there was little to keep price from falling toward $750. The session low printed just above $750, landing within pennies of the forecast's final stretch target. The trending action the model called for showed up as a steady, one-directional push lower rather than choppy back-and-forth trade.
On the falling market side, the preferred short at a failed rally into $770 never triggered because sellers took control from much lower levels, so the stops above $775 and $772 were never in play. The forecast flagged a VIX reversal higher off 16.50 while price failed to hold gains as the key confirmation signal for shorts, and that signal fired clearly. Every downside target on the board came into play, from $768 and $766 down through $760, $758 and the $757 stretch target, with $750 nearly reached. On the rising market side, the $768 to $766 dip-buy zone was never reached from above, so the long setup never activated. The guidance to keep longs lighter than shorts until the tape confirmed direction kept traders out of a session that never offered buyers a foothold.
The VIX rose 16.22% to 19.99, a sharp reversal from Thursday's calm that confirms fear returned to the market. Volume of 65.08M ran above average, showing real conviction behind the selling rather than a drift on light participation. The bearish bias, the warning about $758 and the $750 flush target all unfolded across levels the forecast had already mapped, even as the move ran past the projected low. The framework adapts as conditions shift, and Friday showed the value of planning for an extended breakdown before it happens. With the long-term bull trend intact above structural support near $640, the framework 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 Friday's session to close out the week and the month with SPY at $761.20 in a deeply put-dominated tape. Price had gapped lower overnight after Thursday held $765 into the close, and that gap took out the floor and dropped SPY right onto $761. The bias hinged on $762, the defining level and the heaviest two-way battle near price, sitting directly overhead as the gate. Reclaiming and holding it would start the gap fill, while failing there would put the next floor in play. The expected move ran from $752 to $767, and the notes warned that with interest stacked so heavily at $765 and $760, this would be a Friday where levels get fought for rather than drifted through. Upside targets stepped through $764, then $765 as the floor that gave way overnight and the level bulls really needed, $767 as the cap on the expected move, and $770 as max upside. On the downside, $760 was the most important level below, a major round number and the line in the sand for the month, where a clean loss could get ugly fast. Below that sat $758 as the next decision point, $755 as the point of last hope, and $752 as max downside, with a wall of interest two points beneath it.
The bearish path played out almost exactly as mapped. SPY opened at $761.38, and the high of $761.46 never even reached the $762 gate, so the gap fill never got off the ground. Once $760 gave way, the warning about things getting ugly fast proved accurate, as sellers sliced through $758 and $755 and blew past the $752 max downside to a low of $750.36, stopping just above that wall of interest. Buyers stepped in from there and pulled price back above the $755 point of last hope, and SPY closed at $755.78, down 1.77% on 65.08M shares of higher-than-average volume. The VIX jumped 16.22% to 19.99, confirming real fear entering the tape. The key takeaway is that the gate held firm and the month's line in the sand broke. Bulls now need to reclaim $758 and then $760 to repair the damage, while a loss of $755 would put the session lows right back in focus.
Validation of the Analysis
Friday's session followed the premarket script almost line for line, and the notes' central "fail there and the next floor is in play" scenario played out in full. The notes were written with spot at 761.20, and SPY opened at $761.38, just 18 cents above the spot price and sitting $1.38 above $760, "the line in the sand for the month." The notes framed everything around $762, "the gate right above us," with a clear choice: "reclaim and hold it and the gap starts to fill, fail there and the next floor is in play." Bulls never even got a real shot at the gate. SPY printed its high of $761.46 early, stalling 54 cents short of $762, and that failure set the tone for the rest of the day.
Once the gate held as resistance, the downside sequence unfolded exactly as mapped. The notes warned that losing $760 "cleanly could get ugly fast," and it did. SPY sliced through $760, then through $758, "the next decision point," and kept going through $755, "our point of last hope." The notes said a failure at $755 "opens 752 as our max downside at the bottom of the expected move, with a wall of interest two points beneath it." That one sentence turned out to be the most precise call of the day. SPY broke through $752 and printed a session low of $750.36, landing right on that wall of interest two points beneath the max downside and holding just 36 cents above $750. Buyers stepped in right where the notes said the interest was stacked. From there, SPY bounced and closed at $755.78, down 1.77%, finishing 78 cents above $755. Price had lost that level intraday and then reclaimed it into the close. Because $762 was never reclaimed, $764, $765, $767, and the $770 max upside all stayed out of play, just as the notes implied they would if the gate failed. The notes also called this "a Friday where the levels get fought for rather than drifted through," and that read held up. The VIX jumped 16.22% to 19.99, and higher than average volume confirmed this was real month-end selling pressure, not a quiet drift lower.
The trading value came from having the entire downside staircase mapped before the open. The cleanest setup was the short on the failure at $762. Risk was defined just above the gate, and the notes laid out a clear trip through $760, $758, and $755 toward $752. That's an eight-point run from the line in the sand to max downside, and price delivered every bit of it and then some. The second opportunity was the reversal long off the wall of interest beneath $752. Buyers who trusted that level caught a 5.42-point bounce from the $750.36 low back above $755 into the close. The map also kept traders out of trouble. With $762 never reclaimed, there was no reason to buy the open looking for a gap fill toward $764 or $765. And once $760 broke cleanly, the notes' "fast trip" warning told traders not to fight the move. A session that rejected the gate, cascaded through every downside level, and bottomed right on the flagged wall of interest shows how tightly these levels framed the day. Heading into November, the battle lines are clear. Bulls need to hold $755 and reclaim $758 and $760 to repair the damage. Bears need to push back under $755 and crack the wall near $750 to open a deeper leg lower.
Looking Ahead
Monday's economic calendar is wide open, with no high-impact releases on the docket. There's no GDP, PCE, PMI, or jobs data to jolt futures before the opening bell, so traders won't have a scheduled catalyst setting the tone at 8:30 AM ET. That may sound uneventful, but a quiet calendar can be useful. Without fresh data to react to, the market will have room to digest everything it absorbed over the past week, including Friday's Employment Cost Index. If investors are still working through what the labor cost picture means for the Fed's next moves, Monday's session could become a referendum on how that data really landed. That's often when you see the market's true conviction, because price action isn't being whipped around by a headline number.
Monday also kicks off the first trading session of the new month, which tends to bring fresh inflows as funds put new capital to work. That kind of buying can give stocks a lift early in the session, but it doesn't always stick, so don't mistake a strong open for a confirmed trend. With no data to anchor the session, corporate news and any weekend headlines will likely carry more weight than usual. Use the quiet calendar to position thoughtfully rather than chase moves. Let the first 30 minutes play out before committing new capital, and pay attention to whether early strength or weakness holds into midday. If the direction holds firm, that's a sign real money is backing the move. If it fades, the market is probably still searching for its next catalyst. Keep position sizes reasonable and stops in place, and treat Monday as a chance to fine-tune your game plan and get set up for the weeks ahead.
Market Sentiment and Key Levels
Friday handed the bears control, and this time it wasn't a quiet rotation story. Sellers took over almost immediately and never really let go, and the heavy volume behind the move tells you real money was heading for the exits. The damage was broad. The Nasdaq tumbled 2.86%, the Russell 2000 fell 1.86%, and the Dow dropped 1.09%. Last week small caps were soaking up the money leaving mega-cap names. That cushion disappeared Friday, and when the Russell joins the selloff instead of offsetting it, the "healthy rotation" argument gets a lot harder to make. Tech leadership took the worst of it, and that kind of pressure on the market's biggest engines drags hard on the cap-weighted averages. Risk appetite cracked across asset classes too, with Bitcoin falling 1.24% and gold sliding 3.46%. Even the traditional safe haven got sold, which hints at forced selling or de-risking rather than a simple rotation into defense. The VIX jumped 16.22% to 19.99, pushing fear right up to the 20 threshold and confirming traders are no longer treating this as orderly repositioning. Bears own the momentum heading into Monday. The one bright spot is that buyers stepped in off the lows late in the session, so the drop wasn't a straight-line capitulation.
SPY settled right on top of first support at $755, which makes that level the line in the sand to start the week. First resistance sits just overhead at $758. A push through there opens the door to $760, followed by $767 and $770 if buyers can mount a real recovery. On the downside, losing $755 likely sends SPY toward $753, then $750 and $745. If $745 gives way, there is little to keep price from falling toward $740. Zoom out and the picture is less alarming. The long-term bull trend remains intact well above structural support at $640, and Friday's drop was a pullback within the broader uptrend channel, not a break of it. That keeps this a dip-buying environment as long as key levels hold. Monday's projected maximum range runs from $747 to $765, with the Put side dominating in an expanding band that points to trending price action mixed with intermittent chop. That makes three straight sessions of Put-side control, and the expanding band says volatility isn't done yet. There's no economic news on Monday's calendar, so technicals will drive the tape, though macro headlines remain the wildcard that could knock SPY out of its range in either direction. Watch whether tech leadership stabilizes or keeps bleeding, since sustained weakness in both mega-cap names and crypto would be needed to signal a deeper pullback. Elevated yields and triple-digit oil linger in the background as inflation worries that could amplify any selling. With SPY sitting on support after a sharp flush, we favor buying dips at $750. Be patient and let the first hour play out, size positions carefully given the elevated VIX, and treat a decisive break of $745 as the signal to step aside.
Expected Price Action
Monday's session brings actionable intelligence generated by our AI model, which projects SPY's maximum range at $747 to $765. With the Put side dominating in an expanding band, the model is calling for trending price action with intermittent chop. There is no economic news due out on Monday, so the market will trade on technicals, with macro headlines as the wildcard that could push price outside its range in either direction. Friday's selloff left SPY finishing just below the middle of Monday's projected range and sitting right on the model's first support at $755. Combined with the Put-heavy tilt of the band, that gives us a bearish bias heading into the new week. The VIX jumped 16.22% to 19.99, signaling that fear is back in the tape. Elevated fear plus sellers in control means support levels could get tested quickly.
The key battleground for Monday is the $755 to $758 zone. $758 is the first resistance and the gate bulls need to clear. A clean push through $758 should target $760, with $765 marking the top of the model's range and $767 and $770 standing as stretch targets if buyers find their footing. On the downside, losing $755 likely sends price toward $753, followed by $750 and then $745, the lowest support and the point of last hope for bulls. If $745 gives way, there is little to keep price from falling toward $740. The bigger picture remains healthy, with SPY well above structural support near $640 and the long-term bull trend intact. Friday's damage is a pullback within the broader uptrend channel, not a breakdown, so this is still a dip-buying market on a broader timeframe.
In the short run, the playbook favors fading strength while watching for a dip-buying opportunity lower down. A bounce into $758 or $760 that stalls sets up a short with $755 and $753 as targets. A break below $755 that holds likely turns Monday into a trend toward $750, which is where we favor stepping in to buy the dip. If $745 cracks, step aside rather than try to catch a falling knife, because $740 can come quickly. If buyers instead reclaim $760 with conviction, the bearish lean fades and a run toward $765 is on the table. Whichever side wins the fight at $755 likely sets the tone for how the new month gets started.
Trading Strategy
The VIX rose 16.22% to 19.99, a sharp jump that puts fear right at the doorstep of the 20 mark and tells you traders are paying up for protection after the heavy selling in tech leadership. Monday brings no economic news, so there's no scheduled catalyst to blame for a surprise move, but that cuts both ways. Price will trade on technicals, and macro headlines remain the wildcard that can blow through levels without warning. With volatility expanding, keep size at roughly half of normal through the first hour and give stops a bit more breathing room in the 0.75-1% range from entry. The Put side controls an expanding band, and the trending action with intermittent chop the model expects means early moves can reverse hard. Let the open settle before committing capital.
In a falling market scenario, shorting a failed rally into $758 to $760 is the cleanest bearish setup. A bounce that stalls in that zone and rolls over is the primary trigger, especially if the VIX pushes back above 20 while price fails to hold gains. The first profit target is $755, with $753 next if sellers keep pressing. Runners can aim for $750, while the projected low at $747 should be treated as a stretch target on a heavy trend-down day. Stops on shorts belong above $763, and aggressive traders can tighten to just above $761. If price loses $745 with conviction, don't chase the flush. Short a failed retest of $745 from underneath instead, targeting $740, since there's little support to slow the slide once that floor gives way. Stops on that breakdown trade belong just above $748. Scale out in layers into support, because selloffs this sharp can snap back violently once sellers run out of ammo.
In a rising market scenario, buying a dip at $750 is our favored trade and the best risk-reward setup on the board. A flush into $750 that holds and firms up is the primary trigger, particularly if the VIX cools off from 19.99 while buyers defend the level. The initial profit target is $753, with $755 next as price works back through first support. Runners can press toward $758 and $760, where sellers are likely waiting. Stops on longs belong below $745, just under the lowest support shelf. If bulls reclaim $760 and hold it, buy a clean retest of $760 as support, targeting $765 at the top of the projected range, with $767 in play for runners only. Stops on that breakout trade belong below $757. With puts in charge of the band and fear rising, any long should start light and add only once the tape confirms direction. The long-term bull trend remains intact above $640, and this is still a dip-buying environment, so the $750 zone is where we want to be a buyer, not a seller. For now, the bears hold short-term momentum as long as $760 caps the upside.
Model’s Projected Range
SPY's projected maximum range for Monday is $747 to $765, with the Put side dominating in an expanding band that suggests trending price action with intermittent chop. Monday brings no economic news due out so the market will trade on technicals. SPY closed at $755.78, down 1.77%, after opening at $761.38 and tagging a high of $761.46 before sellers took control and dragged price to a low of $750.36, with buyers stepping in late to recover part of the drop. SPY is trading near our model's first support at $755, and macro headlines remain the wildcard that could push price out of its range in either direction. If SPY can push through $758, the next target is $760, but if $755 gives way, price likely slides toward $753, and if the lowest support at $745 breaks, there is little to keep price from falling toward $740. 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 $758, $760, $767, $770, while support rests at $755, $753, $750, $745. We favor buying dips at $750. Bitcoin fell 1.24% to close below $76,811, while the MAG stocks had a mostly red day across the board led by NVIDIA down 4.22%, and sustained weakness across both leadership groups would be required to signal a deeper pullback. The VIX closed at 19.99, up 16.22%, suggesting elevated fear given the sharp selloff and heavy pressure on tech leadership. SPY pulled back within its broader uptrend channel with structural support near $640.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended Friday in a Ranging Market State with SPY closing at $755.78. Because SPY closed above MSI resistance, $755.68 now becomes support for Monday. Extended targets were not printing at the close. The MSI rescaled lower overnight and held a bearish state, with extended targets visible below in premarket near 759.4. By the open SPY was already testing $760 major support and trading below MSI support. Extended targets printed below again in the AM session, and we never fade extended targets. SPY kept sliding toward the next major support at $750.
During the PM session the MSI went through rapid rescaling lower, which signals a strong trend, until price reached $750. Then the extended targets stopped, and almost on a dime SPY reversed and rallied $5. SPY closed down 1.77% after being down well over 2.5%. It was still a bloodbath, but it could have been a lot worse. QQQ took the brunt of the selling and was down over 4% at one point before it also reversed in the last hour. At the end of the day the MSI rescaled into a very wide $10.05 Ranging state, which gives price plenty of room to move.
For Monday the MSI forecast is sideways to slightly lower as a continuation of Friday's action. Without extended targets at the close, the move may be modest and is likely to find support at key levels below. A wide Ranging state points to digestion rather than a fresh trend, unless an outside catalyst shows up. MSI support is $765.73 with resistance at $755.68.
Key Levels and Market Movements:
Thursday we stated, "Bulls want to see overnight price hold $767.79 and climb back toward the $769.49 close," and added, "Bears want to see $767.79 and then $766.8 fail, with the MSI rescaling lower and extended targets printing below," while also noting, "If SPY breaks below $766.8 with extended targets printing below, sell rallies into $766.8 targeting $766.62 and $766.50."
The bears took the script and ran with it. The MSI rescaled lower overnight, and extended targets printed below in premarket near 759.4, so the bear case was already in motion before the bell. SPY opened at $761.38, below MSI support and pressing on $760 major support. The bulls never got a look at $767.79. The session high was just $761.46, so every bounce was sold almost right away. Extended targets kept printing below through the AM session, which told us to stay out of longs and stick with the trend.
The PM session was where the real damage showed up. The MSI went through rapid rescaling lower as SPY knifed toward $750 major support, and QQQ was down more than 4% at its worst. SPY bottomed at $750.36, and then the extended targets stopped. That was the tell. Almost on a dime, sellers ran out of fuel and SPY ripped $5 off the low. It closed at $755.78, just above the new MSI resistance at $755.68, as the MSI rescaled into a very wide Ranging state into the close.
Four trades followed. The first came early, with SPY below MSI support and extended targets printing below. That setup was selling rallies into MSI support-turned-resistance, targeting the premarket level near 759.4 under $760 major support, and it was reached cleanly. The second came after the next rescale lower in the AM session. That trade was selling the test of the new MSI resistance and riding it to the new MSI support as extended targets kept printing below. The third came during the rapid rescaling lower in the PM session. Each new MSI resistance that got tested was a short, targeting the lower line all the way down toward $750. The fourth was the failed breakdown. Once the extended targets stopped at $750 and price reclaimed the level, buying the reclaim targeting the upper MSI line paid off with the $5 reversal. At minimum it was a 4-for-4 session for traders following the framework.
SPY fell 1.77% on volume of 65.08 million shares, well above average, so this selling had real conviction behind it. The VIX jumped 16.22% to 19.99, and fear finally showed up in a meaningful way. 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:
Monday has light economic news, so the market is likely to move more sideways to down than trend given the Ranging state at the close. With no scheduled releases, weekend headlines and the follow-through from Friday's heavy tech selling will likely set the early tone overnight. The MSI closed in a very wide $10.05 Ranging state. SPY closed above $755.68, so that level now acts as support for Monday, and $765.73 sits overhead as the upper boundary of the range.
Bulls want to see overnight price hold $755.68 and build on the late-day reversal. From there they need to push back toward $760 major support-turned-resistance and Friday's $761.46 high with the MSI rescaling higher. That would confirm Friday's $750 low as a meaningful bottom. Bears want to see $755.68 fail, with the MSI rescaling lower and extended targets printing below again. That would press SPY back toward Friday's $750.36 low and the $750 major support level where the selling stopped.
In a Ranging state after a down day, Monday is likely to continue Friday's direction, but the lack of extended targets at the close suggests the downside may be limited. Expect some sideways chop with a slight downward lean. Any rally toward $760 and $761.46 that stalls is a potential short targeting $755.68. A rally that stretches toward $765.73 and gets rejected is an even better short. If SPY holds $755.68 from above, dips into that level are a buying opportunity targeting $760. If SPY breaks below $755.68 with extended targets printing below, sell rallies into $755.68 targeting $750.36 and $750. A failed breakdown below $755.68 that quickly reclaims the level is a long back toward $760. If bulls can reclaim and hold $765.73 with conviction, that would signal a real shift in control. Watch for the MSI to rescale overnight and move into a trending state, and let it confirm direction 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 $756 to $790 and higher strike Calls while buying $767 to $774 Calls, indicating the Dealers' desire to participate in any relief rally on Monday should price break $767 and move back into bullish territory. The ceiling for Monday appears to be $765, so any recovery is likely to be muted and simply push SPY back to the 50 DMA. Dealers are also selling $740 to $755 Puts in very large size, and Dealers do not sell ATM Puts unless they believe there is a floor in the market at $740. That's a big tell. It signals confidence that the low is near, at least for Monday. Price may drift as low as $740, but it's unlikely to stay there before moving back higher. $740 is also the lower trend line support from last April, which makes it a logical candidate for an interim low. To the downside, Dealers are buying $739 to $690 and lower strike Puts in a 3:1 ratio to the Calls they're buying, displaying continued concern that prices could move lower. There is a Call wall at $770 which will act as resistance, and below it sits a Put wall at $760 that will also provide resistance, at least on the first or second attempt to clear it. Below $765 is bearish and above $770 is bullish, with chop and traps in between. Gamma is heavily negative, so levels of support and resistance are unlikely to hold. Dealer positioning is unchanged at neutral/slightly bullish.
Looking Ahead to Next Friday:
Dealers are selling SPY $767 to $805 and higher strike Calls while buying $756 and $766 Calls, indicating the Dealers' desire to participate in any relief rally next week. The ceiling for the week appears to be $767. To the downside, Dealers are buying $755 to $695 and lower strike Puts in a 4:1 ratio to the Calls they're buying, showing they remain heavily hedged against further downside. There is a Call wall at $770 which will provide resistance, with a Put wall at $767 that also needs to be cleared for the bulls to take back control. Because Gamma is heavily negative, that Put wall overhead is unlikely to hold once price reaches it. Below $767 is bearish and above $770 is bullish, with chop and traps in between. Gamma flips positive as price approaches $770, so SPY is more likely to mean revert than break through that level. On the flip side, a move below $750 could lead to significantly lower prices, possibly as low as the 200 DMA at $729. 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
Buy dips near $750, targeting $755 and $758, with stops below $745.
With no economic data on Monday and macro headlines in control, 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!
