Market Insights: Thursday, October 9th, 2025

Market Overview

Stocks pulled back on Thursday as the recent record-setting rally paused, with investors digesting AI momentum, interest rate expectations, and the continued absence of key economic data due to the government shutdown. The S&P 500 dipped 0.29%, retreating modestly from Wednesday’s all-time high. The Nasdaq lost 0.08%, outperforming thanks to strength in Nvidia, which closed at a new record. The Dow lagged, falling 0.52%, as rising long-term bond yields and weakness in gold and cyclicals weighed on sentiment.

Markets opened cautiously and trended lower into the afternoon as the rally in gold cooled sharply. The metal dropped back below $4,000 for the first time in days, reflecting profit-taking and a bounce in the US dollar following new peace efforts in the Middle East. Meanwhile, the shutdown continues to delay economic releases, including Thursday’s jobless claims report, forcing investors to shift their focus to the upcoming earnings season. The lack of fresh data has left markets more reliant on positioning and sentiment as they await a catalyst.

The first hints of earnings season arrived with results from PepsiCo and Delta Air Lines. Pepsi beat expectations on both earnings and revenue, while Delta’s strong report sparked gains across the airline sector. The real test, however, begins next week when major banks report third-quarter results and set the tone for corporate guidance heading into year-end. Expectations remain elevated amid continued AI enthusiasm, but traders are watching closely for signs of earnings-driven validation—or disappointment.

Elsewhere, rare earth stocks surged after Beijing announced fresh export controls, adding a geopolitical layer to an already tense global backdrop. Despite Thursday’s mild pullback, the prevailing uptrend remains intact, though signs of exhaustion and resistance at recent highs continue to build. Investors remain focused on liquidity conditions, the Fed’s rate outlook, and the potential impact of prolonged political and macroeconomic uncertainty.

SPY Performance

SPY fell 0.29% to close at $671.09 after opening at $672.78 and trading between $669.12 and $673.58. Volume came in at 54.06 million shares, slightly below average. The session opened near the highs before fading into midday, with SPY retracing to the $669 zone before bouncing modestly into the close. Bulls defended support, but the tape showed signs of exhaustion after a week of steady gains. Despite the red close, the structure remained intact with price holding above key support.

Major Indices Performance

The Dow led to the downside, falling 0.52%, pressured by weakness in financials and cyclicals. The S&P 500 dropped 0.29%, while the Nasdaq slipped just 0.08%, outperforming thanks to strong gains in Nvidia. The Russell 2000 fell 0.78%, reflecting a rotation out of small caps and renewed caution as earnings season approaches. Sector rotation was evident, with energy and gold miners pulling back, while select tech names continued to find buyers.

Notable Stock Movements

Nvidia hit a new all-time high, gaining 2.75% and continuing its leadership in the AI trade. Microsoft and Amazon also rose modestly, while Tesla and Apple traded flat. Alphabet, Netflix, and Meta ended slightly lower. Delta gained over 4% on strong earnings and lifted the airline group, while Pepsi rose after reporting solid results. Gold miners dropped sharply as bullion pulled back. Rare earth stocks spiked after China’s export restrictions were announced, marking a strong move in an otherwise soft tape.

Commodity and Cryptocurrency Updates

Crude oil dropped 0.68% to close at $61.96, holding just above our model’s long-term downside target of $60. Gold fell 1.46% to $4,003 after briefly breaching $4,060 earlier in the week. Bitcoin rose 0.74% to finish at $124,427, continuing to consolidate near recent highs. Ethereum remained above $4,300, and crypto strength helped offset some of the equity weakness, signaling continued risk appetite.

Treasury Yield Information

The 10-year Treasury yield rose 0.82% to close at 4.166%, moving back toward the upper end of its recent range. While still below critical danger levels, the climb in yields added modest pressure to stocks. A move above 4.5% would begin to challenge the bull case, and 5% remains the line where broader risk assets would face meaningful headwinds. For now, yields remain supportive of equities but are trending higher.

Previous Day’s Forecast Analysis

Wednesday’s roadmap projected a range of $669 to $677.25, with upside targets at $675 and $677 and support at $669 and $665. The premarket outlook favored more upside as long as $670 held, but cautioned that $675 would be a key test for bulls. The session was expected to test resistance but potentially stall without a fresh catalyst, given overbought conditions and extended upside targets.

Market Performance vs. Forecast

SPY opened at $672.78 and briefly tagged $673.58 before fading to a low of $669.12 and closing at $671.09. The roadmap correctly identified $675 as a ceiling and called for a retracement if bulls couldn’t break through. Price held above $669, validating the forecasted support level. The session aligned with the expected script of early strength, resistance at the highs, and a fade into consolidation. The roadmap again proved precise in anticipating both range and directional structure.

Premarket Analysis Summary

Thursday’s 7:08 AM premarket note set bias at $672.25 with upside targets at $674.25 and $676.50. It cautioned that price needed to hold above $672 to sustain momentum, or risk falling back to $670, $669, or even $667. The session followed this blueprint, failing to hold $672 and testing support near $669 before stabilizing. Once again, the roadmap guided traders through the day’s action with reliable levels and directional cues.

Validation of the Analysis

SPY respected both the roadmap and premarket levels, with the failure at $673.50 and bounce at $669 confirming the technical structure. Although the close was red, the bullish trend held as SPY defended the midpoint of the week’s range. Traders following the roadmap were able to anticipate the rejection at resistance and manage risk through the intraday fade. The structure remains clean, and the roadmap once again added clarity to a choppy session.

Looking Ahead

Friday brings no economic data, and the shutdown continues to cloud the calendar. Focus will shift to next week’s bank earnings, which will provide the first major test of sentiment. SPY remains in a tight range between $665 and $675, with neither side taking firm control. Bulls need a breakout above $675 to unlock new highs, while bears need a close below $663 to shift structure. Without fresh news, positioning and momentum will continue to drive intraday moves.

Market Sentiment and Key Levels

SPY closed at $671.09, holding inside the bull zone and above key supports. Resistance remains at $673, $675, and $677. Support is at $669, $665, and $660. The market is coiled tightly just below resistance and could break either way. Bulls are in control above $663, and only a close below $640 would confirm a structural trend shift. Until then, dips remain buyable, though upside progress has slowed.

Expected Price Action

SPY’s projected range for Friday is $668 to $675, with Calls and Puts balanced and suggesting potential chop with wide intraday swings. Bulls will try to reclaim $673 and push toward $675 and $677. If $669 fails, expect a test of $665 and $660. With sentiment still positive and earnings season approaching, we expect volatility to remain elevated. Bulls maintain the edge but must defend support or risk short-term exhaustion.

Trading Strategy

Remain long above $665, with dip zones at $669 and $666. Targets to the upside are $673, $675, and $677. Failed breakouts near $675–$677 can be faded with stops above resistance. Avoid chasing strength and be prepared for sudden reversals. The VIX ticked up 2.14% to 16.65, indicating mild risk-off behavior. Continue to take profits quickly and avoid large overnight exposure. The trend remains up, but momentum is cooling.

Model’s Projected Range

SPY’s projected maximum range for Friday sits between $664.75 and $675.25, with the Put side dominating in an expanding yet narrow band that suggests choppy price action interlaced with brief trending periods. With only the University of Michigan reports due, there is little economic news to drive the market, so SPY is likely to continue trading within the $665 to $675 range, waiting for a catalyst to break one way or the other. The market continues to grind higher, testing both ends of this range. Today SPY faced some profit-taking, with the index selling off slightly and closing down 29 basis points at $671.16. SPY tried to test $668 but could only reach $669 before buyers stepped in, just as we anticipated. While the session looked worse intraday than it truly was, by the close SPY sat squarely in the middle of its range, consolidating and continuing to trap shorts. SPY would need to close below $640 for these bullish conditions to change, and with today’s close well above $663, the bulls remain firmly in control. Macro risks persist with the ongoing government shutdown, and the longer it lasts, the greater the potential impact on the market. So far, investors have looked past these external threats, but a prolonged shutdown could eventually lead to a repricing of risk and multiple compression. Until meaningful weakness emerges, however, the trend remains higher, with dips continuing to provide buying opportunities. Overnight and into the open, SPY once again made a new intraday all-time high before selling off, a pattern that has become typical of this market. A quick pop higher followed by minor profit-taking continues to define price behavior, with every dip toward the lower end of the range being bought. With the $668 level successfully defended once again, the bulls remain in control. Volume was slightly below average, but dip buyers remain active. Options data shows institutions remain heavily hedged, yet until SPY breaks below key support levels, the prevailing trend stays bullish. We continue to buy dips while exercising caution when fading rallies. With SPY well above the critical $640 threshold, bulls are likely to keep pushing prices to new highs while bears remain sidelined. Bears will gain some confidence if SPY drops below $668 in the near term, and should that level fail, the market could test $665. If $665 holds, it will likely trigger another bear trap. A true shift in market control requires a failure at $661, and even then, a decisive break below $640 is needed to confirm a trend reversal and trigger our base case of a 10–15% pullback this year. For Friday, resistance sits at $674, $675, $677, and $680, with support at $670, $668, $665, and $661. Above $675 there is a strong wall of resistance likely to limit gains. Since reclaiming $585, SPY has maintained a steady uptrend fueled by dip buyers. Mag stocks were mixed, with Apple, Alphabet, Tesla, and Microsoft falling while the others rallied. Crypto and ETH moved lower, though ETH remains above $4300, supporting the risk-on environment. A sustained close below $4300, paired with weakness in Mag leaders, could serve as an early warning of market softness. Until then, the path of least resistance remains higher. We continue to favor quick profit-taking and caution with overnight holds. The VIX rose 0.80% to 16.43, reflecting continued market strength. We still recommend adding protection to any long book, as VIX below 23 supports the bullish case, but a breakout above it could finally trigger the long-anticipated pullback. SPY closed above the redrawn lower bull trend channel from the April lows, reinforcing the bull trend. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the day in a very narrow Bullish Trending Market State, with SPY closing at MSI resistance. There were no extended targets printing at the close with a few printing near the day’s lows. The MSI opened the day in a bullish state but as price reached a new high, it fell and the MSI rescaled several times lower to very narrow bearish states which warned traders not to believe the day’s sell off would turn into anything significant. For Thursday the MSI is implying slightly higher prices but still trading within a $10 range. MSI support is $670.75 with resistance at $671.21.
Key Levels and Market Movements:
On Wednesday we wrote, “Absent a catalyst, it is likely the market continues to grind higher, setting new records along the way,” and noted, “The market is expected to test the upper end of the $665 to $675 range, with $670 acting as a magnet that will likely be tested again as the bulls build energy for a breakout,” while also stating, “Overnight, the bulls want to defend $670, and if it holds, the market should continue its march to new highs.” With this context, and with the MSI holding in a narrow bullish range overnight while SPY made a new intraday high without extended targets above, we looked for a failed breakout to get short. We got that opportunity right at the open and entered short at $673.50, setting our first target at MSI support at $671.22, which was hit in the first hour. We then set T2 at the next MSI support level at $670.30, which was reached before 10:30 am. With both targets achieved and a stop moved to breakeven, we decided to trail the remainder, anticipating a possible test of the midpoint of the range or the premarket level of $669.50. The MSI continued to rescale lower in a narrow range, and with no extended targets printing, we decided to close our short once price reached $669.50 and call it a day. And so by 1 pm we were done for the day, one and done thanks a clear plan, disciplined execution, and strong alignment between MSI signals, our broader market model, and key technical levels. The MSI continues to be a cornerstone of our consistent trading process.
Trading Strategy Based on MSI:
Friday has only UoM sentiment reports, which are unlikely to move the market. As such, watch the MSI for clues and trade what you see, given the external risks currently facing the market. Absent a catalyst, it is likely the market attempts to reverse today’s decline and recover some of the lost ground. The market continues to trade in a range between $665 and $675, with $668 acting as a magnet that will likely be tested again as the bulls build energy for a breakout. Dips to as low as $665 will likely trap bears, setting up another short squeeze as bulls continue pushing prices higher. The market still needs time to digest and consolidate recent gains, but any good news could easily send SPY out of this range and into new all-time highs. Given the market’s strength, we will be cautious fading any pushes higher, making failed breakouts especially useful setups. Overnight, the bulls want to defend $668, and if it holds, the market will likely continue to make new highs. A break of $668 will probably lead to a test of $665, which is also expected to hold. With no meaningful news, watch the MSI and price action closely for direction. We expect more two-way trading as we continue to buy dips at major support or short weakness at or near $674 on failed breakouts. The bears come to life in scale only on a drop below $640, and as always, failed moves remain among the highest-probability setups. Stay nimble, avoid trades during Ranging Market States, and ensure full alignment with MSI. Providing real-time insights into market control, momentum shifts, and actionable levels, the MSI when integrated with our Pre-Market and Post-Market Reports continues to sharpen execution precision and elevate trade quality. If you haven’t yet integrated MSI and our model levels into your process, now is the time. Contact your representative to get started as these tools are designed to support consistency and enhance performance.

Dealer Positioning Analysis

Summary of Current Dealer Positioning:
Dealers are selling SPY $674 to $690 and higher strike Calls while buying $672 to $673 Calls indicating the Dealers’ desire to participate in any relief rally tomorrow. The ceiling for tomorrow appears to be $674. To the downside, Dealers are buying $671 to $600 and lower strike Puts in a 4:1 ratio to the Calls they’re selling/buying displaying some concern that prices could move lower tomorrow. Dealer positioning is unchanged from bearish to bearish.
Looking Ahead to Friday:
Dealers are selling SPY $672 to $690 and higher strike Calls implying the Dealers’ belief that prices may move more sideways next week and continue to consolidate. The ceiling for the week appears to be $680. To the downside, Dealers are buying $671 to $540 and lower strike Puts in a 5:1 ratio to the Calls they’re selling, reflecting a bearish outlook for the week. For the week Dealer positioning is unchanged from bearish to bearish, although slightly more 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

SPY closed at $671.09, still above critical levels but showing fatigue. Respect the range, use the roadmap and MSI to time entries, and remain tactical. Bulls remain in control, but resistance is heavy. Fade breakouts that fail and be ready to buy dips that align with support. Stay nimble and protect profits.

Good luck and good trading!