Market Insights: Thursday, December 4th, 2025

Market Overview
Stocks ended little changed Thursday as Wall Street digested a fresh round of jobs data and increasingly priced in a December rate cut. The Dow fell 0.07%, the S&P 500 edged up 0.09%, and the Nasdaq rose 0.22%. Investors remain focused on the Fed’s upcoming meeting, with FedWatch now showing nearly 90% odds of a December cut after ADP private payrolls disappointed earlier this week. Meanwhile, Thursday’s jobless claims unexpectedly dropped to a three-year low, showing labor market resilience, but November was also the worst month for corporate layoffs in three years. That contrast kept trading muted and choppy, with bulls struggling to push beyond key resistance levels. Speculation surrounding the potential replacement of Jerome Powell by Kevin Hassett added another layer of uncertainty, especially as bond market participants voiced concern over the possibility of a more dovish Fed under a Trump-backed candidate. Meta led tech higher, rising over 3% after reports of cost-cutting measures in its metaverse division, and Nvidia added 2%, helping lift the Nasdaq. Earnings season is winding down with mixed results, as Salesforce surged on a strong outlook, while Snowflake slumped after a revenue miss. Bitcoin hovered near $92,000 after briefly crossing $93,000 midweek. With markets largely rangebound, traders now turn to Friday’s PCE and UoM reports as the next major catalysts.

SPY Performance
SPY opened at $685.30 and closed nearly flat, up 0.09% at $684.49, after trading between $681.34 and $685.37. The session marked another day of sideways price action, with bulls failing once again to reclaim control above $685. An early dip toward $681.50 was met with renewed buying, lifting SPY back toward the upper end of its multi-session range. Volume came in at 56.35 million shares, slightly below average, reflecting low conviction in either direction. SPY remains stuck between $675 and $685, and while this range has held for over a week, Friday’s inflation data could finally force a directional move.

Major Indices Performance
The S&P 500 rose 0.09%, the Nasdaq gained 0.22%, and the Dow slipped 0.07%. The Russell 2000 outperformed with a 0.86% gain. Sector action was mixed, with technology showing leadership driven by Meta and Nvidia, while defensive names lagged. Despite the muted moves, optimism remains elevated among traders expecting the Fed to shift dovish next week, though that conviction could be challenged by a hot PCE print.

Notable Stock Movements
Meta jumped 3.43% on news of internal cost-cutting, helping lift the tech sector. Nvidia gained over 2% amid continued demand for AI-driven names. Microsoft struggled, weighing on the broader Mag7 basket, which closed mixed. Tesla and Alphabet managed modest gains, while Apple and Amazon ended flat. Salesforce rallied on a raised earnings outlook, while Snowflake tumbled after a weak revenue forecast. Bitcoin fell 1.25% to close above $92,500, while crude oil gained 1.37% to settle at $59.76, reinforcing our model’s bullish long-term outlook for crude if prices stay above $56. Gold inched up 0.18% to $4,240.

Treasury Yield Information
The 10-year yield climbed 1.08% to close at 4.102%, still within the comfort zone for equities. While the recent drift lower in yields has supported tech and risk assets, markets remain sensitive to any shift above 4.5%, where valuation concerns may reemerge. For now, the bond market appears aligned with expectations of easier policy ahead, though that could change quickly depending on Friday’s inflation reading.

Looking Ahead
Friday’s PCE and University of Michigan reports are the final major data points ahead of the Fed’s meeting next week. Traders will be watching closely for any signs of stickier inflation or weakening consumer sentiment. The SPY has been consolidating tightly and looks primed for a breakout, with direction likely hinging on Friday’s data. If inflation prints cool, SPY could finally reclaim $685 and begin a march toward new highs. A hot print, however, may bring sellers back in force. Macro headlines will dominate sentiment into the weekend.

Market Sentiment and Key Levels
SPY closed at $684.49, up 0.09%, holding above short-term support. Key resistance remains at $685, followed by $686, $687, and $690. Support rests at $682, $678, $675, and $670. Dealer positioning projects a range between $679 and $689 for Friday, with the Call side dominating in a narrow, choppy band that suggests more grinding action unless a catalyst breaks the range. Momentum remains in favor of the bulls while price holds above $680.

Expected Price Action
Thursday’s session reinforced the ongoing coil between $675 and $685, with price repeatedly testing the upper band but unable to break through. Traders should prepare for a possible breakout Friday following PCE data. A strong move above $685 opens the path to $688 and potentially $690, while a break below $678 could accelerate losses toward $675 or even $670. Volume remains a key tell — any move backed by heavier-than-average activity could mark a meaningful trend shift.

Trading Strategy
Maintain a buy-the-dip bias near $680 with stops below $677. Longs are favored above $683.60, especially on a decisive break through $685. Failed breakout attempts near $685 may offer tactical short entries. Until the range resolves, avoid chasing strength or weakness. Expect more two-way action unless Friday’s data delivers a clear catalyst. Focus on setups at key support and resistance zones and adjust size accordingly.

Model’s Projected Range

SPY’s projected maximum range for Friday sits between $679 and $689, with the Call side dominating in a narrow band that signals choppy price action with brief trending periods. Today the market moved sideways in an extremely tight range that made trading difficult as SPY rose only 0.09% to close at $684.49 just below $685 where the bulls regain full control. Overnight SPY pushed slightly higher and briefly reclaimed $685 before failing to hold the level and selling off to major support at $681.50. Once again the bulls bought the dip and lifted price back to an unchanged close, keeping SPY trapped in the $675 to $685 range that has defined the past week. This range is still likely to break soon, perhaps on Friday with the release of PCE or UoM, either of which could drive SPY toward new all-time highs or derail the bull trend and give the bears another chance at lower prices. Overnight the bulls will aim to hold $680 to build on the current rally, but if $680 fails SPY will test $678 and a break there opens the door to $675. Volume was below average and does not help the broader market, and absent a catalyst resistance sits at $685, $686/$687, and $690 with support at $682, $678, and $675. Above $685 gains should remain muted due to heavy resistance, while a break below $675 could send price toward $670. The broader trend remains bullish above $640 and the near term still favors the bulls. For Friday we defer to the prevailing trend and prefer longs from support above $680 while watching for short setups as price approaches $685. Crypto fell and Mag stocks were mixed, and as noted for weeks the market is likely to continue rising until meaningful weakness returns in these leadership groups. VIX fell 1.87% to 15.78 and remains in neutral territory waiting for a catalyst, and although December is historically strong the mixed start keeps outcomes uncertain. Traders should remain flexible and trade what they see with an edge to the bulls for continuation of the recent rally. SPY closed mid-channel within a redrawn bull trend that continues to weaken even as the brief bear channel has disappeared, suggesting that higher prices remain likely.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the session in a Ranging Market State, with SPY closing in the upper end of the range. There were no extended targets at the close, and only brief moments of extended targets throughout the session which forecasted a sideways, choppy day which is exactly what SPY delivered. A very tight range all day with the MSI mostly in a wide-ranging state that simply wasn’t worth trading. Overnight the MSI rescaled higher and before the open. SPY briefly moved above $685. But that didn’t hold and as quickly as it rose, SPY fell and saw price approach $680 where the bulls have been buying all week. Brief periods of bearish states presented throughout the day, but they were narrow and short lived and simply attempted to trap traders short. For Friday the MSI is forecasting more sideways price action which will likely encounter heavy resistance above $685 but also support at $682. MSI support is currently at $683.01 with resistance at $684.75.
Key Levels and Market Movements:
On Wednesday we stated “For tomorrow these cues suggest higher prices, yet there is a wall at $685 that the bulls must clear to push toward new all time highs,” and added “we continue to favor the bulls while still watching for shorts on failed breakouts near $685,” while also noting “For Thursday we will look for bounces toward $680 and also seek shorts up to $685 for another rangebound session.” With this context, and with the MSI trading in the premarket above $685 but without extended targets above, we wanted to fade the pop and the textbook failed breakout, so we entered short at $685.25 with T1 at MSI support at $684.12. T1 hit quickly and with the MSI rescaling lower, we set T2 at MSI support at $682.90, which also hit, leaving us to trail the remaining 10% with a stop at breakeven. The MSI kept rescaling lower and a flash down to $682.25 produced a clean failed breakdown, so we exited the remainder for a solid first trade. We considered going long, but a few brief extended targets kept us sidelined, and as quickly as SPY fell it rallied back toward $685. The MSI shifted into a ranging state, which we do not trade, and it stayed that way almost the entire session. Not wanting to force trades in messy conditions, we chose to call it a day before 11 am and waited for better setups. One and done and a nice one it was 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:
Today was messy again, but we had forecast a sideways session and that is exactly what played out. Tomorrow could deliver more of the same or could break out on PCE, and a breakout is coming soon with the higher probability favoring the upside, which would open the door to testing all-time highs. For tomorrow we defer to the long trend but remain open to the possibility that the trend fails at major resistance at $685 and price repeats today’s move back toward $680. This level has been tested several times and has held each time, yet we do not believe another hold is likely, so if price falls to $680 we think the probabilities shift toward lower prices. Even so, the broader bull trend suggests this is a lower-probability outcome and that price instead breaks higher tomorrow or Monday, allowing the bulls to take full control and push to new highs in December, though the move toward $690 will likely be slow and choppy. A failure at $680 overnight will lead to a test of $678, and if that fails, price is likely to accelerate toward $675 and possibly $670. Crypto moved slightly lower today and Mag stocks were mixed, so staying conservative until SPY reclaims $685 is wise. Monitoring these two leadership groups will help confirm whether the December bull trend remains intact. For Friday we will tentatively look for bounces toward $680 and also seek shorts up to $685 for another rangebound session, as the MSI is forecasting slightly higher prices. If the bulls hold $680 overnight, they are likely to make a run at $685 or higher to take full control, but if $680 fails, the market is likely to test lower levels. Macro risks remain, so traders should stay alert for news about Venezuela or other developments that could affect markets, and with the long-term bull trend intact above $640, we continue to favor the bulls and the larger trend as long as price holds above $680. 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 $685 to $705 and higher strike Calls implying the Dealers’ belief that prices may stagnate at current levels on Friday. The ceiling for tomorrow appears to be $690. To the downside, Dealers are buying $684 to $565 and lower strike Puts in a 3:1 ratio to the Calls they’re selling displaying little concern that prices could move lower tomorrow. Dealer positioning has changed from neutral/slightly bullish to neutral/slightly bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $685 to $705 and higher strike Calls indicating the Dealers’ belief that prices may not rally significantly higher by the end of next week. The ceiling for the week appears to be $700. To the downside, Dealers are buying $684 to $565 and lower strike Puts in a 4:1 ratio to the Calls they’re selling, reflecting a market that is less concerned about lower prices. For the week Dealer positioning is unchanged from slightly bearish to slightly 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
Trim longs near $685 and manage risk closely ahead of PCE. Look for dip buys above $680 and continue watching for failed breakout setups near $685 for short entries. Stay aligned with MSI and respect model ranges and dealer positioning. Trade smaller until the range breaks, and prepare for potential volatility Friday. While the trend favors the bulls, flexibility and discipline are key as the market awaits its next catalyst.

Good luck and good trading!