Market Insights: Friday, November 21st, 2025

Market Overview
Stocks managed to bounce back on Friday, closing out a volatile week with modest gains as optimism over a potential December rate cut took center stage. The Nasdaq climbed 0.88%, the S&P 500 added 0.99%, and the Dow outperformed with a 1.08% gain, rising just shy of 500 points. The rally followed dovish comments from New York Fed President John Williams, who noted the possibility of a “near-term” rate cut. His remarks sent December rate cut odds soaring to 75%, up sharply from 40% on Thursday, and gave markets a temporary reprieve after several days of intense selling pressure. However, these gains weren’t enough to reverse the week’s broader losses, with the Nasdaq down nearly 3% and the S&P 500 off close to 2%. Crypto remained under heavy pressure, with Bitcoin sliding as low as $82,000, its lowest level in months as concerns around an AI bubble, persistent inflation, and weakening consumer sentiment weighed heavily. Nvidia, which sparked a brief rally midweek with stellar earnings, closed down nearly 1% and failed to inspire follow-through, leaving the market on shaky footing heading into the holiday-shortened week. A University of Michigan survey added to the unease, showing consumer sentiment deteriorated further in November with inflation and job loss fears top of mind.

SPY Performance
SPY opened at $654.62 and climbed to a session high of $664.55 before reversing slightly into the close to finish at $659.00, up 0.99% for the day. The move helped recover a portion of Thursday’s steep losses, though it failed to clear key resistance at $665 and finished just below the critical $660 mark. Volume surged again to 116.2 million shares, likely driven by monthly OPEX. The premarket retest of $650 held firm, giving bulls a base to push off from. The rally, while welcome, stopped short of the levels required to regain control of the broader trend, and with no economic data on Monday, momentum may stall without a fresh catalyst. The question now is whether this was a true recovery or simply a dead cat bounce. SPY remains below the redrawn bear channel resistance and continues to trade within a volatile and fragile structure.

Major Indices Performance
The Dow posted a strong 1.08% gain, while the Nasdaq rose 0.88%, and the S&P 500 added 0.99%. The Russell 2000 led with a sharp 2.76% rally, suggesting short covering in oversold small-cap names. While the green close helped to offset Thursday’s damage, the broader trend remains bearish until proven otherwise. Market participants remain cautious, especially as crypto weakness and leadership fatigue continue to erode sentiment.

Notable Stock Movements
It was a mixed day for the Magnificent Seven, with only half finishing in the green. Alphabet led the upside, gaining 3.56%, while Nvidia faded again, closing down nearly 1% despite its earnings beat earlier in the week. The failure of Nvidia to sustain a rally adds weight to fears that tech may be topping and supports the idea that we’re nearing the early stages of a broader correction. Cracks in leadership remain the clearest signal of broader weakness.

Commodity and Cryptocurrency Updates
Crude oil fell 1.78% to $57.95, continuing its slide and breaking below our long-standing $60 target. As long as oil holds above $56, a rebound toward $70 remains viable, but the path is narrowing. Gold slipped 0.18% to $4,052, while Bitcoin tumbled another 3.21% to close just above $84,400. Crypto’s persistent weakness reinforces risk-off sentiment and raises the probability that a 10–15% market correction is underway.

Treasury Yield Information
The 10-year Treasury yield dropped 1% to finish at 4.064%. Though down from recent highs, yields remain in a danger zone. If they return to or exceed 4.5%, equities could face renewed pressure. A move above 5% would almost certainly trigger a 20%+ correction. For now, yields are stabilizing but remain a key risk.

Looking Ahead
The upcoming week is shortened due to the Thanksgiving holiday, but it won't be quiet. While Monday has no economic data, Tuesday brings PPI and Retail Sales, followed by Wednesday's Prelim GDP, Unemployment Claims, and PCE. The market is hanging in a precarious balance. Bulls must hold $655 to build on Friday’s rally, while bears are watching $650 for a breakdown. If $655 holds, a push to $660 and $666 is possible. But if it fails, another retest of $650 is likely and, with repeated testing, could lead to a breakdown toward $645 or even $640. Reclaiming $666 gives bulls a real chance to make a run at $670, though it’s still a long shot without a catalyst.

Market Sentiment and Key Levels
SPY closed at $659.00, still below bear channel resistance and under the $660 pivot. Resistance is now seen at $663, $666, $669, and $671, while support lies at $655, $650, $645, and $640. A move above $660 could trigger momentum toward $669, while a break below $650 exposes the downside to $645 and $640. The VIX dropped 11.06% to 23.47 but remains above the danger line, signaling that volatility is still elevated. We continue to favor seeing a spike above 30 before calling for any durable bottom.

Expected Price Action
SPY’s projected range for Monday sits between $653 and $666. The Put side remains dominant, suggesting a directional move is likely but not necessarily on Monday. While today’s rally offered temporary relief, the technical picture remains bearish below $666, and continued weakness in leadership stocks and crypto suggests pressure will persist. We believe this bounce is most likely a dead cat, with downside risk increasing next week.

Trading Strategy
We recommend fading rallies toward $665 and favor short setups on breakdowns below $655. Long trades remain risky unless SPY can reclaim $666 with confirmation. Flexibility is key with holiday volumes and economic data ahead. The model has confirmed a bear channel structure, officially ending the bull trend from April. Until bulls retake $670, the path of least resistance is lower.

Model’s Projected Range

SPY’s projected maximum range for Thursday sits between $648.25 and $669.50, with the Put side dominating in a wide expanding band that signals trending action with brief periods of chop. Today the market tried to recover part of yesterday’s decline and closed up 0.99% at $659. Overnight the market retested $650 and that level held, allowing bulls to push price higher. With only PMI and OPEX today, there was little news to move markets. The question now is whether this bounce is a dead cat or the start of a renewed bull leg. We believe it is likely a dead cat bounce and that lower prices may come next week. PMI was slightly higher than expected but the delayed September jobs report showed job losses and rising inflation. All eyes now shift to the December Fed meeting. A rate cut is possible but far from guaranteed. At the open SPY hovered near $656 and attempted another move toward $650, but a higher low stopped the selling and price rallied sharply. That move stalled at $665 and SPY then sold off into the close, finishing below $660 and well under $670, a level the bulls must reclaim to take control. Monday has no economic data but Tuesday and Wednesday bring several reports that may impact markets. Over the weekend and into the premarket the bulls must hold $655 to build on today’s rally. If they fail, price will retest $650 which may hold once more but will eventually fail with repeated tests. If the bulls hold $655, they will target $660 and then $666. Reclaiming $666 gives them a real chance to push above $670. Volume today was almost double average but this was likely due to Monthly OPEX. Absent a catalyst, resistance sits at $663, $666, $669, and $671, with support at $655, $650, $645, and $640. Above $660 momentum could push SPY toward $669. Below $650 price could fall to $645 quickly. The broader trend remains bullish above $640 even though the near term favors the bears. For Monday we prefer selling rallies toward $665 or shorting below $655. Long trades remain risky. Crypto fell sharply today while Mag stocks were mixed which continues to signal stress in leadership. This increases the odds of the ten to fifteen percent correction we have warned about. VIX fell 11.06% to 23.47 but remains above the danger level for equities which suggests more volatility ahead. We still prefer to see a VIX spike above 30 before expecting any real bottom. With a short week ahead anything can happen so traders must stay flexible and trade what they see. SPY closed in the middle of the redrawn bear trend channel with resistance at $670 and support at $640.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the session in a Bearish Trending Market State, with SPY at MSI support. There were extended targets in the premarket and in both the am and pm sessions. Extended targets were minimal, offering little insight into herd participation during the rally and sell-off. No extended targets appeared at the close, and the day began with MSI still bearish from the previous session. This held until late morning when the MSI rescaled to a very narrow bullish state which saw price move mostly sideways. A narrow bearish state then followed after noon and finally around 1 pm the MSI moved to a more “normal” bullish state. But the MSI was narrow pretty much all day which is really an indication of a range and not necessarily a strong trend. This is what led to the pullback into the close. The MSI is now narrowly bearish, indicating likely sideways to downward price movement overnight and Monday. MSI resistance is $660.59 with support at $659.35.
Key Levels and Market Movements:
On Wednesday we stated “If $650 fails to hold overnight or tomorrow, further weakness is likely with a potential test of the $640 line in the sand”, while adding “if the bulls can defend $650 they will attempt to push price back toward $660 to recover part of today’s damage”, and also stating “for Friday we favor selling rallies toward $660 or clean breakdowns below $650 while avoiding long entries unless price breaks above $670, which remains a low-probability outcome.” With this context, and with the MSI in a bearish state and SPY opening just below $660, we entered short at $656 on a quadruple top at the open and set T1 at the premarket level of $654.10. With T1 secured we set T2 at the next premarket level down at $651.10. With two targets hit we moved our stop to breakeven and trailed for a move to $650 and a retest of yesterday’s lows. That move never came as price held above $651 and reversed, stopping us out of the remaining 10% at breakeven. We were not interested in going long so we stayed flat with one win in the books and waited to see how price behaved near $660. A very narrow MSI and tight range formed and while a short was possible, we shifted into profit protection mode and ended the day just after noon. It was a strong week for us and there was no reason to risk gains on OPEX in a bearish market that was rallying. So one and done, thanks again 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:
While today’s recovery was impressive, the highs did not hold and the market sold off into the close. The MSI is forecasting sideways to down prices on Monday so we will continue to favor the short side until $670 is reclaimed. If the bulls can overcome that level, they will have a more balanced battle with the bears. A failure of $655 to hold in the Sunday or premarket session makes it very likely we see $650 and possibly new lows. There is nothing scheduled to move markets on Monday but weekend risk from the current administration is always present. Stay alert for news of an invasion of Venezuela or other macro forces that could move the markets next week. Absent these risks, fade rallies to $666 and sell below $655 while looking for possible failed breakdown longs near $650. We believe there is one more bounce at this level but we would not long subsequent tests of this low. Though the long-term bull trend remains intact above $640, the bears hold the near-term edge and if $650 fails to hold overnight, further weakness is likely with a potential test of the $640 line in the sand. If that level fails, the 200 DMA near $615 becomes a realistic downside target for 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 $663 to $700 and higher strike Calls while also buying $660 to $662 Calls as well as $668 Calls indicating the Dealers’ desire to participate in any rally on Monday. The ceiling for Monday appears to be $671. To the downside, Dealers are buying $659 to $565 and lower strike Puts in a 4:1 ratio to the Calls they’re selling/buying displaying concern that prices could move lower Monday. Dealer positioning is unchanged from bearish to bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $669 to $700 and higher strike Calls while also buying $660 to $668 Calls indicating the Dealers desire to participate in any rally next week. The ceiling for the week appears to be $674. To the downside, Dealers are buying $659 to $565 and lower strike Puts in a 6:1 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 slightly less 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
Reduce exposure on strength into $660–$665 unless volume and leadership validate the move. Avoid chasing upside unless SPY reclaims $666. Remain tactical and favor failed breakout or breakdown trades. With OPEX behind us and key data looming, volatility is expected to continue. The model has redrawn the trend into a bear channel, and unless the bulls reclaim control above $670, the bears remain firmly in charge.

Good luck and good trading!