Market Insights: Tuesday, November 18th, 2025

Market Overview

Stocks dropped sharply again Tuesday, marking the fourth straight day of losses as worries over an AI bubble, economic uncertainty, and key earnings and data releases weighed on sentiment. The S&P 500 fell 0.84%, the Dow declined by 1.07%, a drop of nearly 500 points, and the Nasdaq lost 1.21%, led by broad selling in Big Tech. While stocks attempted a midday bounce, selling pressure returned late in the session and drove equities to new lows, reflecting a market under increasing stress ahead of Wednesday’s FOMC Minutes and Nvidia earnings report.

Nvidia shed 2.8% in anticipation of its results, while Amazon and Microsoft dropped 4.4% and 2.7%, respectively. Even previously resilient names buckled under the weight of valuation concerns and bearish macro sentiment. Crypto volatility continued, with Bitcoin briefly dipping below $90,000 before closing modestly higher. Cloudflare was hit by a major outage, ending the day down 2.9%. Economic anxiety is rising as investors prepare for the delayed September jobs report and earnings from major retailers like Walmart and Target later in the week. Until then, trading remains reactive and driven by headline risk and technical levels.

SPY Performance

SPY opened at $662.00 and briefly rallied to $665.12 before selling off sharply into the afternoon, hitting a low of $655.86 and closing at $660.10, down 0.84% on the day. Volume surged to 108.74 million shares—well above average—signaling aggressive selling pressure and elevated concern. SPY now sits well below the 50-day moving average and has broken through the lower boundary of its redrawn bull channel from April. With today’s close near key support, momentum has shifted further in favor of the bears.

Major Indices Performance

The Nasdaq led declines with a loss of 1.21%, while the Dow shed 1.07% and the S&P 500 closed down 0.84%. The Russell 2000 offered the only glimmer of relative strength, rising 0.21%, though it remains in a longer-term downtrend. Sector breadth was negative, with losses across most major sectors, especially Tech and Consumer Discretionary. Continued selling in mega caps and renewed concerns about AI valuations drove the weakness.

Notable Stock Movements

Netflix was the only Magnificent Seven stock to post gains, rising 3.39% on positive streaming data. Nvidia dropped 2.8% ahead of earnings, while Amazon fell 4.4% and Microsoft lost 2.7%. Cloudflare closed 2.9% lower after a major outage hit its web services. Home Depot also declined after missing earnings and cutting guidance. Tesla and Alphabet traded mixed, but most mega caps remained under pressure, reinforcing bearish sentiment toward leadership names.

Commodity and Cryptocurrency Updates

Crude oil climbed 1.22% to $60.59, in line with our model’s long-standing forecast. While further downside is possible, holding above $56 keeps the door open for a rebound toward $70. Gold dipped 0.10% to $4,070, while Bitcoin reversed early losses to gain 1.08%, closing above $92,900. Crypto’s bounce offered limited relief and remains highly vulnerable to broader risk-off flows.

Treasury Yield Information

The 10-year Treasury yield dipped slightly by 0.24% to close at 4.121%. While still below danger zones, any move back above 4.5% would pressure equities further. Should yields rise toward 5.0% or higher, a correction of 20% or more remains firmly on the table. Bond market behavior will be crucial to watch as economic data resumes this week.

Looking Ahead

All eyes now turn to Wednesday’s FOMC Minutes and Nvidia earnings report, both of which carry major implications for market direction. Thursday brings September’s delayed jobs report, followed by PMI data on Friday. Until then, traders should expect continued volatility as price action remains highly sensitive to headlines and positioning. Bulls must hold $660 overnight or risk a deeper move toward $652 or even $640.

Market Sentiment and Key Levels

SPY closed just below the redrawn bull channel, placing additional pressure on bulls to defend key support. Resistance sits at $663, $664, and $665, while support lies at $659, $655, and $652. Bulls need to reclaim $663 to have a chance at a bounce into $665. A breakdown below $655 would significantly increase correction risk. The VIX jumped 10.23% to 24.67, rising above the critical 23 threshold that often marks a shift into a decisively risk-off regime.

Expected Price Action

SPY’s projected range for Wednesday is $655 to $670, with downside skew from dealer Put positioning. The late-day selloff solidified bearish control, though intraday rallies to $665 remain possible. A sustained break of $655 could unleash further selling pressure, while any bounce is likely capped below $668–$670 without a strong catalyst. Price action is expected to remain volatile and choppy heading into Nvidia’s report.

Trading Strategy

Remain tactical and flexible. Short rallies into $663–$665 unless supported by strong volume and leadership. Consider long entries only on failed breakdowns below $655 that quickly reverse with confirmation. The broader bull trend remains intact above $640, but in the near term, the bears hold the edge. Risk management is key, and failed breakouts or breakdowns continue to offer the highest-probability setups.

Model’s Projected Range

SPY’s projected maximum range for Wednesday sits between $652.25 and $674.50, with the Put side dominating in a wide and expanding band that signals trending action with brief periods of chop. FOMC Minutes arrive tomorrow followed by Nvidia earnings after the close, and both events carry meaningful market-moving potential, so traders should continue to expect headline driven volatility. Overnight the market moved lower and continued to do so until reaching major support at $655 where the bulls finally stepped in and pushed price toward $665, but that bounce failed as a late afternoon selloff pulled SPY down 0.84 percent to $660.08, giving the bears a significant foothold in the ongoing battle for control. Well below the 50 DMA, the next downside reference is the 150 DMA and the volume spike to nearly twice average reinforces the severity of today’s decline. With SPY closing at $660 the battle continues with the bulls still owning the broader trend as long as price stays above $640, yet in the near term the bears clearly have the edge. Overnight the bulls will try to hold $660 which would open the door to a back test of $665, but if $660 fails and the bears maintain control, price could easily retest today’s lows and a break there would push SPY toward levels not seen in months. For the bulls to have any chance to alter the narrative they need to keep price above $660 through the night and into Wednesday, at which point the market will likely pause ahead of both the FOMC minutes and Nvidia’s earnings. Absent a major catalyst, resistance sits at $663, $664, and $665, while support sits at $659, $655, and $652, and gains on Wednesday are likely capped above $665 while a break of $655 could send SPY into a slide toward $640. Crypto bounced today which was a lone bright spot while all Mag stocks except Netflix fell, and as we have warned, sustained weakness in leadership and crypto could trigger the ten to fifteen percent correction we have been anticipating, and with this weakness now emerging our model has increased the probability that a correction begins sooner rather than later. VIX rose 10.23 percent to 24.67 placing it above the 23 danger zone for equities, and we expect further volatility which we would fade but only after VIX spikes above 30. SPY closed below the redrawn lower boundary of its bull channel from the April lows, and while the broader bull structure remains intact, additional closes below this channel will likely trigger the model to begin forming a new bear trend channel. 

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. There were extended targets for much of the premarket and in the morning session, but few in the afternoon session. Overnight the MSI remained in a bearish state and rescaled lower several times which saw price break last week’s lows. But without extended targets below, once price reached major support at $655, the bulls stepped in and reversed much of the day’s decline, only to fail as the MSI rescaled to a narrow bullish state. As price got back to $665, the MSI did little to convince traders the worst was over and instead rescaled to its current ranging state which saw price fall back toward $660, well off the lows but severely damaging the bull trend. With SPY below the 50 DMA the MSI for Wednesday is forecasting sideways to down prices with a probable test of today’s lows and as well as a test of MSI resistance at $665. MSI support is $658.37 with resistance at $662.87.
Key Levels and Market Movements:
On Monday we wrote “If today’s lows fail and do not recover quickly however, the market falls to $655” and noted “For Tuesday we favor selling rallies to $670 and shorting clean breaks below $660”, while also adding “we will also consider long entries on failed breakdowns that break today’s lows and recover quickly”. With this context, and with the MSI opening in a bearish state with plenty of extended targets below, we waited for a chance to get short with the trend and to see if our $655 forecast would come to bear. We got that opportunity right at the open with a textbook failed breakout at $664 which we sold short to align with the prevailing pressure. We set T1 at MSI support at $662.30 and the MSI quickly rescaled lower, giving us T2 at $657.35 which also came quickly. With both targets secured, we moved our stop to breakeven and trailed, expecting $655 to print. Price reached $656 and broke it briefly before forming a textbook failed breakdown. With no extended targets below, we exited and reversed long, setting T1 at the premarket level of $658.35 and T2 at MSI resistance at $660.80. Both targets hit and with a stop at breakeven, we held the remaining 10% to see how much strength the bulls had. SPY fell sharply and nearly stopped us out, then reversed just as quickly and rallied with the MSI rescaling into a bullish state. Several narrow bullish MSI rescalings followed and after price chopped below MSI resistance for more than an hour, we exited the final portion of the position and called it a day. Two for two, once again thanks to having a clear plan, maintaining patience and discipline, and staying aligned with MSI signals, market structure, and our broader trading framework. The MSI continues to prove its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
New version of GPT available - Continue chatting to use the old version, or start a new chat for the latest version. The key structural threshold for the broader bull market remains $640, and only a decisive break below that level would shift long-term control to the bears. Failed breakouts and failed breakdowns continue to offer the highest-probability setups, so remain flexible, avoid trading during Ranging Market States, 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

Summary of Current Dealer Positioning:
Dealers are selling SPY $667 to $700 and higher strike Calls while also buying $661 to $666 Calls indicating the Dealers’ desire to participate in any rally tomorrow. The ceiling for tomorrow appears to be $680. To the downside, Dealers are buying $660 to $600 and lower strike Puts in a 3:1 ratio to the Calls they’re selling/buying displaying little concern that prices could move much lower tomorrow. Dealer positioning is unchanged from neutral/slightly bearish to neutral/slightly bearish.
Looking Ahead to Friday:
Dealers are selling SPY $676 to $700 and higher strike Calls while also buying $661 to $675 Calls indicating the Dealers desire to participate in any rally this week. The ceiling for the week appears to be $680. To the downside, Dealers are buying $660 to $600 and lower strike Puts in a 7:1 ratio to the Calls they’re selling/buying, reflecting a market that continues to be concerned about lower prices. For the week Dealer positioning is unchanged from bearish to bearish but more so. 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

Stay disciplined. Use strength into $663–$665 to reduce exposure unless confirmed by strong breadth and volume. Focus on high-quality setups supported by MSI and structural signals. Keep position sizes light and protect capital in front of Wednesday’s major catalysts. Avoid chasing moves in either direction and prepare for whipsaws and news-driven reversals.

Good luck and good trading!