Market Insights: Monday, March 24th, 2025
Market Overview
Stocks rallied sharply Monday as optimism around President Trump’s comments on tariffs lifted sentiment across the board. The Dow, S&P 500, and Nasdaq all closed near their session highs after reports surfaced that the administration might scale back the scope of its reciprocal tariffs set for April 2nd. Trump hinted that “a lot of countries” could receive exemptions, signaling a softer stance than markets had feared. “We may take less than what they’re charging because they’ve charged us so much,” he said, helping push risk assets higher.
The S&P 500 surged nearly 1.8% as it continued its rebound from a four-week losing streak. The Nasdaq led all major indices, up more than 2.2%, while the Dow jumped 1.4%, driven by broad-based gains in tech and industrials. Relief over the tariff news sparked a powerful late-session rally as investors embraced the possibility that the trade war escalation could be paused. Treasury yields moved higher, with the 10-year climbing to 4.33%, reflecting reduced demand for safe-haven assets and renewed appetite for risk.
Tesla soared nearly 12% on reduced fears of auto-related tariffs, leading a strong move in the Magnificent Seven. Tech names also caught a tailwind from developments out of China, where Ant Financial said it expects to cut AI costs by shifting away from Nvidia chips. Meanwhile, PMI data showed mixed signals—strength in services but continued softness in manufacturing—fueling the belief that the Fed may lean dovish in upcoming meetings. The big macro focus this week is Friday’s PCE inflation report, which could shape the Fed’s next move. Earnings from Lululemon, GameStop, and Dollar Tree will also be watched closely.
SPY Performance
SPY broke out of its recent range with a powerful move higher, closing the session at $574.01, up 1.78%. After opening at $570.84, the ETF pushed to a high of $575.15 before easing slightly into the close. Volume came in at 49.97 million shares, about average but solid considering the prior session was Quad Witching. SPY’s strong finish above $570 marks its first close above the 200-day moving average in two weeks, a major technical shift that suggests bulls may be regaining control.
Major Indices Performance
The Russell 2000 posted the largest gain among major indices, rallying 2.51% as small caps roared back to life. The Nasdaq followed closely with a 2.27% gain, driven by tech strength, while the S&P 500 climbed 1.78%. The Dow rose 1.42% in a broad-based rally, fueled by easing trade war concerns. The rally gained steam after President Trump’s comments suggesting a narrower set of reciprocal tariffs. Sectors were broadly green, with cyclical and growth-oriented names outperforming. Defensive sectors also participated but lagged behind. The tone was decisively risk-on as optimism spread across the market.
Notable Stock Movements
Tesla led the way with an explosive 11.93% gain, as reduced expectations for auto tariffs gave the EV maker a huge lift. It was a green day for the entire Magnificent Seven, with strong gains across the board. Apple, Amazon, Microsoft, Meta, Alphabet, and Nvidia all posted solid advances, reflecting growing investor confidence in mega-cap tech leadership. Nvidia bounced after a recent breather, while enthusiasm around Ant Financial’s chip announcement added fuel to the broader tech rally. The group’s strong performance underscores bullish sentiment returning to key growth stocks.
Commodity and Cryptocurrency Updates
Crude oil advanced 1.42% to close at $69.24, continuing to hover near recent highs. While prices remain firm, our model continues to forecast a move lower toward the $60 level unless supply disruptions materialize. That does not mean short Crude…simply wait for lower prices to initiate long positions. Gold slipped 0.23% to $3,041 per ounce, pausing its recent momentum. Although the long-term trend remains bullish, the current rally may be overextended. Bitcoin surged 3.64% to close above $88,200, bolstered by the broader risk-on sentiment. We continue to favor long setups in Bitcoin between $83,000 and $77,000 with profits taken near $85,000 and above.
Treasury Yield Information
The 10-year Treasury yield jumped 2% to close at 4.335%, rising as fears around an aggressive tariff wave diminished. This move reflects the market’s growing risk appetite and fading demand for safety. While yields remain below the key 4.5% threshold, continued upside could pressure equities. A move above 5% remains the danger zone for equities, with 5.2% marking the likely start of a 20% correction. For now, the moderate rise in yields aligns with today’s bullish tone across the market.
Previous Day’s Forecast Analysis
Friday’s forecast projected a trading range of $558 to $570 for SPY, with a neutral-to-bearish bias. The model favored short setups until $570 was convincingly cleared, pointing to $575 as the next resistance level. Support was noted at $560 and $558, with a breakdown below those levels targeting $555. The model cautioned that any failed breakout above $570 would likely result in a reversal, and stressed that rallies would continue to be sold unless SPY could sustain a move above the 200-day moving average. The forecast leaned bearish but left the door open for a breakout with sustained momentum.
Market Performance vs. Forecast
SPY opened at $570.84 and exploded to a high of $575.15, ultimately closing at $574.01. This marked a clear break above the prior day’s projected range and the key $570 resistance level, exceeding even the model’s upper range of $570. The rally pushed beyond the 200 DMA for the first time in two weeks, signaling a potential shift in trend. The move to $575 offered a textbook breakout, and traders following the forecast had a strong long entry once $570 was cleared. The model’s resistance levels provided excellent targets, with $575 serving as a major ceiling where price briefly paused. The accurate call on $570 being the line between bulls and bears gave traders a clear pivot for execution.
Premarket Analysis Summary
In Monday’s premarket analysis, posted at 8:50 AM ET, SPY was trading at $571.14. The model flagged $569 as the key bias level and identified upside targets at $572, $575, and $577. Support levels were listed at $569, $567, and $565. The analysis leaned bullish, favoring long trades above $569 and cautioning against short trades unless strong intraday weakness developed. The forecast expected a steady upward drift, with buyers stepping in at support and a clear bias toward continuation as long as $569 held.
Validation of the Analysis
Monday’s price action validated the premarket analysis nearly to perfection. SPY remained above the $569 bias level all session, pushing through each upside target with momentum. After a brief dip near $570.20, price ripped to $575.15, brushing the model’s final target of $577. The forecast’s preference for long trades above $569 was spot on, and the clean hold of this level early in the session gave traders confidence to ride the rally. Those who followed the levels had clear entries at support and ample opportunities to capture gains into resistance. The accuracy of the premarket analysis once again highlighted the model’s precision.
Looking Ahead
The calendar quiets down until Thursday’s GDP and Unemployment Claims data, followed by Friday’s PCE report—widely seen as the Fed’s preferred inflation gauge. With today’s rally breaking the recent range, traders will be closely watching for follow-through or signs of exhaustion. The absence of catalysts early in the week could mean tighter ranges and more two-way trading until Thursday’s macro events hit the tape.
Market Sentiment and Key Levels
SPY finished the day at $574, closing decisively above the 200 DMA for the first time in two weeks. The breakout above $570 strengthens the bulls’ grip on the market and opens the door to further upside. Major resistance now stands at $575, $580, and $582, with $585 remaining the line that separates bulls from bears. Support is now at $573, $570, and $565. If $570 fails, the bears could reassert themselves, pushing price back toward $565. For now, sentiment leans bullish as long as SPY stays above $570, with growing momentum toward a test of $580 and beyond.
Expected Price Action
Our AI model forecasts a trading range between $568 and $578 for Tuesday, with a bullish bias. We expect traders to test overhead resistance levels at $575 to $580. A sustained breakout above $580 could push SPY toward $582 and ultimately $585. However, if SPY falls back below $570, expect a retest of $565. A break below $565 would shift the bias back to the bears. This forecast is actionable intelligence and traders should monitor how SPY behaves near these pivotal levels, particularly in light of rising volatility and Thursday’s key data.
Trading Strategy
For Tuesday, consider long trades if SPY remains above $570, targeting $575 and $580. If SPY clears $580 with strength, the next logical upside target is $582. Tighten stops into resistance and manage risk carefully given the crowded resistance zone between $575 and $580. On the downside, if SPY breaks below $570, short trades can be considered targeting $567, $565, and potentially $563. Given elevated volatility, quick exits are advised on failed breakdowns. The VIX remains elevated, signaling traders should reduce position size and use tight stops, especially around economic data. Avoid overexposure until direction is confirmed and remain nimble with a focus on trading with the trend.
Model’s Projected Range
Our model projects a maximum trading range between $566 and $578.25 for Tuesday, slightly wider than previous sessions and indicative of choppy price action with periods of potential trending action. The session is Call-dominated, reflecting a slightly bullish tilt. SPY broke out of the recent narrow range and closed above the 200 DMA, signaling potential follow-through to the upside. Resistance is stacked at $575, $580, and $582, with support at $573, $570, and $565. A break above $582 opens the path toward $585, while failure to hold $570 risks a slide to $565 or lower. There’s little support below $565 to prevent a move to $560 or lower, and little resistance above $582 to stop price from advancing toward $590. Today’s close above the 200-day moving average—the first in two weeks—is significant. The tight range that previously capped price has broken, and while a heavy wall of resistance remains between $575 and $580, the higher price pushes into that zone, the more likely it is that bulls reclaim the critical $585 level—the clear line dividing bull control from bear control. Our current lean: the bears lost a meaningful amount of control today. Their case weakens substantially unless $570 fails. If $570 holds, price likely pushes toward $580, potentially pauses, dips, and then advances to the $585 "DMZ" zone. A break below $570 puts the 200 DMA back in play and opens the door for a retest of $565, which becomes the final stand for the bulls. If $565 gives way, expect downside momentum to accelerate. On the macro side, PMI data came in mixed—strength in services offset by weakness in manufacturing. This leans dovish and supports the lower-rate narrative. However, with the April 2nd tariff deadline looming, a negative market reaction remains possible this week. If we get through that event without new lows, we expect a bullish grind higher into the end of Q2. SPY remains mid-range within a broad bear trend channel drawn from the December highs, leaving room for movement in either direction. This channel is likely to continue containing price for several weeks. With the channel from December highs still intact, SPY remains mid-range, with room to run either direction depending on news flow.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI is currently in a narrow Bullish Trending Market State, with price closing above resistance turned support. There are extended targets printing above the MSI indicating a herd willing to push price higher. But with a narrow MSI range, the trend is weakening and is likely to find major resistance at $575. Overnight the MSI rescaled higher and printed extended targets the entire time indicating a strong bull trend which saw price move beyond the 200 DMA. The MSI remained in a narrow range all day with extended targets printing for much of the day. MSI support is currently $569.84 and lower at $567.90.
Key Levels and Market Movements:
We stated Friday, “its highly likely price attempts to break the 200 DMA once again but fails.” We also stated, “as long as $565 holds the bulls have a very slight edge on subsequent tests of $570.” Finally we stated, “Above $570 the door will be open to $575.” With this plan in hand, at the open and with price already testing and failing to break the 200 DMA in the premarket, and with the MSI in a bullish state with extended targets above, the only viable trade was a long from MSI support. Fortunately a failed breakdown just after the open set up a perfect entry long at $570.70. Given price was above MSI resistance turned support, we went to our model’s levels from Friday and today to find our first target. The premarket identified $572 as a viable target so we took first profits at this level and held for $575, a level identified in both the post and premarket newsletters. By noon, price got very close to $575 so we took a second target at $574 to ensure we captured 90% of our profits. While price pulled back by 2 pm ET, with our stop at breakeven, and with extended targets keeping us out of any short trades, we held into the close for $575 which got tagged just before the close. Another one and done day but one that was a lot simpler than last Friday. A solid start to the week made possible by planning the day, sticking to the plan and using the MSI and our model to guide us. The MSI displays who controls the market, when and where they took control while providing levels of support and resistance for exits. When we combine the MSI with our model’s levels and our daily trading plan, we almost always end the day in the green. The MSI does this every single day, day in and day out keeping users out of trouble with actionable information to ensure traders stay on the right side of the market, trading with the trend, while providing levels to take profits. We highly recommend incorporating the MSI into your trading arsenal, combining it with our trading plan, to maximize your long-term success.
Trading Strategy Based on MSI:
Tuesday has no material economic news, but it is a tariff week so we advise staying tuned for news out of the White House. Absent any external catalyst, our model is forecasting choppy price action on Tuesday. With the MSI in its current state, its highly likely price attempts to move higher on Tuesday. As long as $570 holds, the market moves toward $580 where it likely pauses, dips and then moves toward the $585 DMZ. Below $570 the bears will once again be looking at the 200 DMA and will attempt to move prices lower. Should this level fail to hold, the market will retest $565 which is a must hold for the bulls to maintain the control they wrestled from the bears today. Therefore our general lean for Tuesday is for SPY to backfill overnight but attempt to move above $575. There is a strong wall of resistance which weakens with each progressive push to $580. Above $580 and price will move to $582. There is no real bear case for tomorrow until price breaks $570. Watch the MSI closely and be careful to trade with the trend above $570. Failed breakouts and failed breakdowns with two way trading continue to be reliable triggers to entry from our major levels. While our model continues to forecast rallies will be sold until price reclaims $585 OR until the trade wars are suspended, the bear case is weakened and long trades above $570 are favored over shorts. Below $570 and we are keen on short set ups. Keep an eye on the MSI for clues and be sure not to fight extended targets given they indicate the herd is participating in any move, higher or lower. Use the MSI to keep you safe, positioning you on the right side of the market, which is critical to trading success. If you utilize our model’s levels with the MSI to stalk entries and exits, trading with the controlling party, your odds of success increase dramatically. If you do not have this valuable tool, we highly suggest contacting your representative to secure a copy.
Dealer Positioning Analysis
Summary of Current Dealer Positioning:
Dealers are selling $575 to $585 and higher strike Calls while selling $568 and to $574 Puts. This implies the Dealer’s belief prices will move higher on Tuesday. Dealers do not sell close to the money Puts unless they are convinced of higher prices. To the downside Dealers are buying $567 to $545 and lower strike Puts in a 2:1 ratio to the Calls/Puts they are selling/buying, implying a neutral posture for Tuesday. This positioning is unchanged from today staying neutral from neutral.
Looking Ahead to Friday:
Dealers are selling $575 to $590 and higher strike Calls while buying $582 Calls indicating the Dealers desire to participate in any rally next week should price break $582. This positioning does not display a lot of confidence by the Dealers that prices will rise beyond $582 this week. To the downside, Dealers are buying $573 to $525 and lower strike Puts in a 5:1 ratio to the Calls they are selling/buying, reflecting an increasingly bearish view for the week. Dealer positioning has changed from bearish to more bearish. Dealers are perhaps preparing for the April 2nd tariffs anticipating the market may become more challenging the closer we get the implementation of these tariffs. Dealers are heavily protected from any quick move lower, buying $475 and lower strike Puts in size. Our recommendation is to follow the Dealers’ lead, ensuring a long book has protection heading into April. While our model sees prices in April moving higher, our model also sees a 20% correction on the horizon near the end of Q2 as the results of the administration’s economic policies begin to be felt by businesses across the globe. We advise reviewing Dealer positioning daily for clues to the market’s direction given Dealer positioning changes and it’s essential to monitor these updates for shifts in sentiment.
Recommendation for Traders
After navigating Quad Witching and a four-week selloff, SPY has finally broken out of its recent range and appears to be on the mend. Higher prices now look likely. While we anticipate typical Tuesday chop, remain flexible—should an unexpected catalyst hit, trade what’s in front of you. We still favor two-way trading, but we’re no longer aggressively selling every rally. Instead, we're leaning toward buying dips, especially as price moves toward the $585 level. A clean break above $585 would give the bulls full control. Until then, the bulls maintain a slight edge—perhaps 60/40—not a dominant mandate by any means. Price may continue to chop around the 200-day moving average as it builds energy for a decisive move—either above $585 or below $565. Should we lose $565, a move to $550 becomes likely. In this kind of environment, we recommend focusing on failed breakout or breakdown setups at major levels. These offer the best risk/reward—especially when confirmed by non-extended readings on the MSI. Counter-trend trades should only be considered when price is testing a key level and conditions align. Stay nimble and disciplined. We're still in a market where the bears are in control, but that could shift quickly. Focus on trading from the edges, where risk is defined and odds improve. As always, review our premarket analysis before 9:00 AM ET for the latest levels and signals.
Good luck and good trading!
