Market Insights: Friday, October 31st, 2025
Market Overview
Stocks bounced Friday, capping off a winning month across all major indices as strong earnings from Amazon and a wave of upbeat tech results helped renew optimism around Big Tech. The Nasdaq rose 0.6%, the S&P 500 gained 0.3%, and the Dow edged up 0.1%, with each index logging solid weekly and monthly gains. The Nasdaq closed out its seventh straight positive month, fueled by another 4%+ rally in October, while the S&P and Dow extended their own winning streaks to six months. Despite some volatility midweek tied to the Fed and mixed earnings, the broader trend remains firmly bullish as investors rotate back into growth stocks and reduce expectations for further rate cuts.
Amazon soared nearly 10%, closing at an all-time high after its third-quarter earnings crushed expectations. The company’s cloud division, Amazon Web Services, posted a 20% revenue jump, confirming a rebound in enterprise spending and solidifying investor faith in Amazon’s AI and cloud strategy. Apple also briefly tapped a record high on Friday following upbeat earnings and guidance, though shares reversed lower during the session. Alphabet and Nvidia helped underpin the tech-led rally, while Netflix extended gains after announcing a 10-for-1 stock split. However, not all sentiment was bullish, as Federal Reserve officials re-emerged with conflicting commentary. Kansas City Fed President Jeff Schmid said he would’ve preferred to hold rates steady, calling inflation “too high,” while Dallas Fed President Lorie Logan echoed similar hawkish concerns despite not being a voting member this year.
Traders are now recalibrating rate cut odds, with just over 60% still expecting a December move, down sharply from over 90% a week ago. Meanwhile, global headlines took a backseat as investors focused on earnings and end-of-month positioning. Despite a week filled with volatility, Powell’s comments, and heavy-hitting tech results, the bulls maintained control, and the month ended with momentum still skewed to the upside.
SPY Performance
SPY opened at $685.07, hit an intraday high at the open, and reversed lower to a low of $679.24 before closing at $681.89, down 0.30%. Volume was average at 78.06 million shares. Despite the modest loss, SPY’s ability to bounce from below $680 once again demonstrated strong underlying demand. Friday’s dip marked the third consecutive session where buyers defended lower levels, keeping the bullish trend intact heading into November.
Major Indices Performance
The Nasdaq led the day with a 0.61% gain, driven by Amazon’s massive earnings-fueled rally. The Dow rose 0.09%, and the S&P 500 added 0.30%, while the Russell 2000 outperformed with a 0.49% gain as small caps participated more broadly in the rally. The Magnificent Seven saw mixed results, with Amazon leading and Netflix and Tesla also in the green, while others posted losses.
Notable Stock Movements
Amazon surged 9.58% to a record close, lifting the entire tech sector and helping SPY stay within striking distance of highs. Netflix held its post-split momentum, while Nvidia gained after announcing it would supply over 260,000 AI chips to South Korea. Apple reversed lower after hitting a record intraday high, as profit-taking set in. Meanwhile, Alphabet and Meta softened slightly following recent earnings moves.
Commodity and Cryptocurrency Updates
Crude oil rose 0.51% to $60.88, in line with our long-standing forecast of a return to $60. While crude remains in a sideways range, a sustained hold above $56 keeps the door open for a push toward $70. Gold declined slightly by 0.17% to $4,009, as risk appetite stabilized. Bitcoin bounced 2.07% to close above $109,700, recovering from a volatile week and reflecting renewed investor appetite for crypto assets.
Treasury Yield Information
The 10-year Treasury yield dipped 0.10% to 4.093%, stabilizing just above the psychologically important 4% level. As noted, 4.5% remains a potential tipping point for equities, with moves above 4.8% likely to induce heavier selling. At 5.2%, the risk of a 20%+ equity correction becomes elevated. The recent yield retreat helped support Friday’s rebound in equities.
Previous Day’s Forecast Analysis
Thursday’s forecast expected SPY to range between $674.25 and $689.50 with resistance at $685 and $688. SPY opened at $685.07, hit resistance immediately, and reversed down to tag $679.24 before closing at $681.89. Once again, the model's projected resistance zones and downside targets aligned perfectly with price action. The roadmap correctly anticipated the rejection of $685 and the bounce from the $679 level.
Market Performance vs. Forecast
The model nailed both the high and low. SPY tagged projected resistance at the open and fell straight into our downside targets. Despite the modest close, traders who followed the model’s suggested strategy were able to fade strength at $685 and capture clean downside to $680 and beyond. As in prior sessions, price respected the roadmap and printed extended targets before bouncing.
Premarket Analysis Summary
Friday’s premarket identified $683.10 as the key bias level, with $688 and $690 as upside targets and $680.60 and $677.60 as support. SPY opened just above $685 but quickly rejected and fell toward support, bouncing just before breaching $679. This outcome was exactly as outlined in the roadmap, emphasizing the utility of waiting for alignment and avoiding premature entries.
Validation of the Analysis
SPY played out the script to near perfection. Our model’s levels, $685 resistance and $680.60 support, were respected and actionable. Traders who followed MSI and roadmap signals saw high-probability setups materialize throughout the day. The post-earnings landscape and Friday’s technical structure gave the bulls just enough room to defend key levels once more.
Looking Ahead
SPY’s projected range for Monday sits between $677 and $688. Resistance remains at $683, $685, $688, and $690, while support rests at $680, $677, $675, and $670. The market will shift focus toward Monday’s Manufacturing PMI pending the shutdown and the early read on November’s positioning. While the mega-cap earnings cycle has largely wrapped, secondary names like AMD and Palantir could spark isolated volatility.
Market Sentiment and Key Levels
SPY closed at $681.89, once again holding above the key $680 level and far above the bull/bear line at $670. The VIX rose slightly by 3.13% to 17.44 but remains well below the stress threshold of 23. With dip buying still dominant and macro pressures muted, bulls retain control. A break above $685 and hold above $688 could unlock new highs, while a clean break below $677 would shift sentiment short-term.
Expected Price Action
Absent a major catalyst, expect range-bound trade between $680 and $688 early next week. A breakout over $690 would likely lead to momentum continuation, while failure to reclaim $685 could bring pressure back to $677. Bulls want to maintain price above $680 and build a base for a November push higher. Watch for potential volatility surrounding PMI data and global headlines.
Trading Strategy
Stay long above $680 with resistance targets at $685 and $688. Avoid breakout chasing above $690 unless momentum is confirmed. If SPY loses $680, look to short with targets at $677 and $675. Trade the roadmap and rely on the MSI for entry timing. Failed breakouts or breakdowns near key levels continue to offer the best setups.
Model’s Projected Range
SPY’s projected maximum range for Monday sits between $671.25 and $688.75, with the Put side dominating in a widening band that suggests trending price action punctuated by intermittent chop. Manufacturing PMI is due Monday, though its release remains uncertain due to the ongoing shutdown, leaving the market primarily focused on earnings, tariff updates, and trade-related headlines. While several notable names such as AMD and Palantir report next week, the mega-cap earnings cycle has mostly wrapped, so the broader market impact from these releases should be limited. Today, SPY fell 0.3%, testing yesterday’s lows and closing at $682.06, essentially flat relative to prior sessions. Once again, the dip was bought, reaffirming that the bulls remain firmly in control. As we’ve noted repeatedly, since April, pullbacks have rarely lasted more than one or two days before buyers stepped in, and as long as SPY remains above $670, the broader bullish structure stays intact. Volume was higher than average but typical for a month-end session, with no signs of distribution or panic selling. Momentum continues to favor the bulls, with $680 marking the first key downside test; below that, $677 and $675 serve as the next likely levels where buyers should defend. Into the weekend, bulls need to maintain price above $679.25, as a failure there without a rapid recovery could trigger a double gap fill, potentially taking SPY down to $670. Conversely, holding above $683 could enable a move through $685 toward $688, and a breakout above $690 would likely spark new all-time highs, while rejection there could invite short-term selling. Absent a major catalyst, resistance for Monday sits at $683, $685, $688, and $690, with support at $680, $677, $675, and $670. Above $690, momentum would accelerate sharply; below $670, a deeper correction could unfold. Crypto and select Mag stocks rebounded today, while others softened, underscoring a mixed but still risk-on tone. As we’ve said for weeks, one red day doesn’t equal sustained weakness, and today’s crypto rebound reinforces that point. Persistent softness across key leaders could still trigger the 10–15% correction we’ve projected, though with each passing week that risk window shifts further into early 2026. For now, the bulls maintain firm control, and the market’s structure continues to support higher prices. The VIX rose 3.13% to 17.44, signaling mild concern but remaining comfortably below the 23 stress threshold. SPY closed mid-channel within its April bull trend, a formation that continues to underpin upside momentum.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI ended the session in a Ranging Market State, with SPY closing at the lower end of the range. Extended targets printed for much of the afternoon session but were inconsistent at best. In the premarket the MSI also printed extended targets above with the MSI in a bullish state with the overnight session seeing SPY move mostly sideways to slightly higher. By the open the MSI had rescaled lower to a ranging state but by noon, the MSI began a series of rapid rescalings lower with extended targets that saw price test the prior day’s lows. Extended targets stopped printing @ 2 pm and price reversed and the MSI rescaled to its current ranging state. For Monday the MSI is forecasting sideways to perhaps lower prices, retesting the day’s lows. MSI support is $681.06 with resistance at $683.94.
Key Levels and Market Movements:
On Thursday we wrote, “Friday could see SPY test both today’s lows and highs,” and noted, “It’s probable SPY attempts to recover some of the day’s decline and move back above $685,” while also stating, “$680 is key support where dip buyers are expected to defend once again.” With this context, and with the MSI opening in a narrow bullish state near $685, we looked for a long off MSI support to start the session. Price quickly moved down to MSI support but failed to hold, dropping to $682.50 where it set up a clean failed breakdown. Although the MSI had rescaled to a ranging state, a setup we typically avoid, we decided to take a cautious long at that level, setting T1 at MSI resistance at $684.05. Once T1 was hit, we targeted the next resistance at $685.41, but that move never materialized. Around 11 a.m., the market turned sharply bearish, reinforcing why we generally avoid trading in a ranging MSI state. We moved our stop to breakeven and were fortunate to exit flat on the remaining 30% after locking in T1. As SPY continued to fall, we waited for the MSI to rescale and provide clarity. When it shifted into a narrow bearish state with extended targets printing below, we entered short at $681.80, setting T1 at MSI support at $680.75. With T1 secured, we set T2 at the next lower MSI level at $680.12 as the indicator continued to rescale lower. With a stop at breakeven and just 10% of the position left, we trailed for a potential bounce at the prior day’s lows. As expected, SPY found support there, and we exited our runner at $679.60. With extended targets printing and two solid winning trades secured, we shifted into profit protection mode and called it a day another session where patience, alignment with MSI signals, and disciplined execution paid off. Two for two once again 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:
Monday could easily see SPY test both the day’s lows and highs, with direction hinging largely on whatever headlines emerge from the White House over the weekend. It’s probable that SPY retests the recent lows, which must hold to prevent a deeper pullback and a potential gap fill from Monday’s open. Should SPY reclaim $685, the bulls will likely attempt to clear $688 and $690, and if they can hold price near $690, new highs next week become increasingly likely. With the market reacting primarily to external catalysts and little meaningful economic data on deck, it remains essential to trade what you see and stay flexible. On the downside, $679 is key support, though dip buyers may begin losing conviction after repeated tests—one or two are fine, but a third failure would likely trigger acceleration toward $677 and $675. Our preference remains to trade in alignment with the broader bullish trend, but we caution against pressing longs too aggressively near the lows. We’re open to shorting a clean breakdown of $679 or fading a failed breakout anywhere between $686 and $690, depending on price action and MSI confirmation. 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 17, 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 $686 to $705 and higher strike Calls while also buying $683 to $685 Calls reflecting the Dealers’ desire to participate in any recovery on Monday. The ceiling for Monday appears to be $690. To the downside, Dealers are buying $682 to $600 and lower strike Puts in a 4:1 ratio to the Calls they’re selling displaying some concern that prices could move lower. Dealer positioning is unchanged from bearish to bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $685 to $705 and higher strike Calls while also buying $683 to $684 Calls reflecting the Dealers’ desire to participate in any rally next week. The ceiling for the week appears to be $690. To the downside, Dealers are buying $682 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 favored above $680 with resistance at $685 and $688. Fade failed breakouts unless macro or earnings momentum supports them. Bears need a decisive break below $677 to flip control. Until then, bulls remain in charge, and dip buying remains the dominant strategy.
Good luck and good trading!
