Market Insights: Tuesday, March 25th, 2025
Market Overview
Stocks extended their winning streak to a third straight session Tuesday, with the S&P 500 and Nasdaq inching higher even as consumer confidence fell to its lowest level in more than four years. Investors remained cautiously optimistic that President Trump may soften his stance on tariffs, with fresh comments fueling hope that the reciprocal duties set for April 2 might be less aggressive than initially feared. Trump said he might give “a lot of countries breaks,” easing fears of a full-scale trade escalation. But uncertainty lingered as the president simultaneously warned of fresh tariffs on pharmaceuticals and autos, while announcing a secondary tariff on nations purchasing Venezuelan oil or gas.
Despite the looming trade risks and a downbeat read on consumer confidence—92.9 in March versus 100.1 in February—markets showed resilience. The Nasdaq led gains, powered by another strong move in Tesla, while the S&P 500 posted a modest uptick. The Dow hovered just above flat. Tuesday’s action largely reflected consolidation after Monday’s sharp rally, with traders treading lightly as they digested recent gains and awaited more clarity on tariff policy. With earnings from GameStop and macro data later in the week, the market paused—but the bulls still held the upper hand.
SPY Performance
SPY posted a modest gain of 0.22% Tuesday, closing at $575.33 after opening at $575.36. The ETF traded in a tight range between a high of $576.41 and a low of $573.69, reflecting consolidation following Monday’s breakout. Volume dropped to 33.25 million shares, well below average, which isn’t surprising after the previous session’s surge. SPY’s ability to hold above the 200-day moving average for a second straight session suggests bulls are maintaining control despite lighter momentum.
Major Indices Performance
The Nasdaq led major indices with a 0.46% gain, fueled by strength in tech and a 3.44% jump in Tesla. The S&P 500 edged up 0.22%, while the Dow barely stayed in the green, rising just 0.04%. The Russell 2000 fell 0.54%, giving back a portion of Monday’s strong advance, as small caps lagged. The broader tone was neutral-to-positive, with Monday’s bullish follow-through stalling somewhat as traders assessed tariff risk and weak consumer confidence data. Sector performance was mixed, with growth and tech maintaining a slight edge over defensive areas.
Notable Stock Movements
Tesla once again led the Magnificent Seven, surging 3.44% and continuing its recovery as trade war fears around autos eased. Most other mega-cap tech stocks posted modest gains, with the exception of Nvidia, which dipped slightly after its recent run. Apple, Amazon, Meta, Alphabet, and Microsoft all ended in the green, but gains were muted. The group’s resilience highlighted continued appetite for growth leaders, especially in the face of geopolitical uncertainty.
Commodity and Cryptocurrency Updates
Crude oil held steady with a minor gain of 0.07%, settling at $69.16. Our model still expects prices to trend lower toward $60 in the absence of significant supply disruptions. Gold rose 0.33% to $3,054 an ounce, extending its recent upward move as investors eyed tariff headlines and softer economic data. Bitcoin climbed 0.56% to close above $88,300, staying well above our preferred long entry range of $83,000 to $77,000. We remain bullish on Bitcoin as a trading vehicle, with profit-taking advised above $85,000.
Treasury Yield Information
The 10-year Treasury yield dipped 0.35% to close at 4.318%, as soft consumer confidence data and lingering economic concerns pulled yields slightly lower. While still well below the danger zone near 4.8%, any sustained move back above 4.5% could pressure equities. For now, the modest decline in yields suggests a cautious but supportive environment for risk assets as traders remain alert to potential tariff shocks.
Previous Day’s Forecast Analysis
Monday’s forecast called for a bullish bias with SPY expected to trade between $568 and $578. Key upside targets were $575 and $580, while $570 was identified as the crucial level for bulls to hold. A break above $575 was expected to lead to $582, while failure to hold $570 could shift momentum back to the bears. The strategy favored long trades above $570, while suggesting short setups only if SPY broke down below this level. The focus was on managing trades near key levels, with volatility and tariff headlines likely to influence action.
Market Performance vs. Forecast
Tuesday’s market action aligned closely with the prior forecast. SPY opened at $575.36 and traded as high as $576.41 before dipping slightly to close at $575.33—right near the $575 resistance level noted in the outlook. The session respected the forecasted range of $568 to $578, and price never breached the key support at $570, maintaining bullish momentum throughout the day. Traders had clear opportunities to ride long positions near support and book profits into resistance. With the forecast flagging $575 as a significant ceiling, the intraday pause at that level offered a textbook moment to lock in gains. The bias level of $570 held firm, validating the forecast’s preference for long trades in the current environment.
Premarket Analysis Summary
In Tuesday’s premarket analysis, posted at 8:50 AM ET, SPY was trading at $575.54. The model set $574 as the critical bias level, expecting continued upward momentum if price held above it. Upside targets were marked at $578, $579, and $582, while downside levels included $574, $572.50, $572, and $569. The forecast leaned bullish, favoring long trades near support. The model advised against short entries unless a sharp intraday reversal developed, expecting a steady but determined grind higher.
Validation of the Analysis
Tuesday’s session provided another strong validation of the premarket analysis. SPY remained above the $574 bias level for nearly the entire session, confirming bullish control. Price came within striking distance of the $578 upside target, peaking at $576.41, before settling slightly below. Dips to support were brief and shallow, allowing traders to buy into strength as forecasted. The slow, orderly climb reflected the day’s expectations for a committed but measured rally. Once again, the premarket levels served as a reliable guide for intraday decision-making, helping traders focus on long setups and avoid unnecessary short positions.
Looking Ahead
With little economic news due Wednesday aside from some Fed speak, markets may remain in a tight range ahead of Thursday’s GDP and unemployment claims. Friday’s PCE report remains the primary macro event of the week and could shape the Fed’s narrative heading into Q2. In the meantime, traders will be watching for any developments on the tariff front, as well as the remainder of this week’s earnings releases, including GameStop.
Market Sentiment and Key Levels
SPY closed the day at $575.33, continuing to hold above its 200-day moving average and extending its breakout from the prior trading range. Market sentiment leans cautiously bullish with price sitting near the top of the current range. Resistance stands at $578, $580, and $582, while support is found at $572, $570, and $568. If SPY pushes above $578, the bulls may test $580 and possibly $585—the line in the sand for full bullish control. A break below $572, however, could invite a quick trip to $570 and a retest of $565. The battle for control is still centered between $565 and $585, with the bulls currently holding the advantage.
Expected Price Action
Our AI model projects a trading range between $570 and $580 for Wednesday, with a bullish bias. This range is narrow, implying potential for choppy, two-way trading. As long as SPY holds above $572, we expect another attempt at $578 and possibly $580. A sustained breakout could bring $582 into view. However, if SPY slips below $572, look for a dip to $570 and potentially $568. The $565 level remains critical support; a break below that would flip momentum decisively in favor of the bears. This is actionable intelligence: traders should track price closely around $572 and $578 to determine if the market will continue grinding higher or shift direction.
Trading Strategy
For Wednesday, long trades are favored if SPY holds above $572. Look for entries near $572 targeting $578 and $580. If SPY clears $580 with strength, $582 is the next stop. Tighten stops near resistance and lock in gains as the market approaches overhead supply. On the downside, if SPY breaks below $572, consider short trades toward $570 and $568—but manage risk tightly as downside momentum may remain limited above $565. The VIX is down to 17.15 and remains subdued, signaling lower volatility. But headline risk around tariffs and Fed comments persists. Traders should size positions accordingly, stay nimble, and adjust quickly around key levels to avoid getting caught on the wrong side of a range-bound market.
Model’s Projected Range
Our model projects a maximum range of $569 to $579.50 for Wednesday, slightly narrower than earlier in the week, which signals potential for sideways action and intraday reversals. The market remains Call-dominated, indicating a slightly bullish bias. Currently $578, $580, and $582 are major resistance with $572, $570, and $568 as major support. There’s limited support below $565, which opens the door for a drop toward $560 or lower. Likewise, resistance above $582 is thin until price approaches the $585 region. SPY closed above its 200-day moving average again, but traded in a tight, narrow range throughout the session. A significant resistance wall remains between $575 and $580. However, the higher price moves within this zone, the easier it becomes for bulls to push through the key $585 level—widely seen as the dividing line between bullish and bearish control. Our general bias leans bullish above $565. In the short term, SPY appears to be building a new range between $572 and $578. We expect this range to continue filling out, potentially setting the stage for a breakout to $580 and, ultimately, a test of $585. That level is likely to act as a stall point where price could consolidate or briefly pull back. A break below $572 would suggest a move back to $565—a critical support level. If $565 fails, bears will likely accelerate the move toward $550. Holding $565 is essential for bulls to maintain control; losing it flips momentum decisively back to the bears. Despite a lack of market-moving news today, the looming April 2nd tariffs remain a potential catalyst. A negative reaction could still emerge later this week. If markets weather April 2nd without setting new lows, we anticipate a bullish drift higher into the end of Q2. SPY currently trades in the middle of a broad bearish trend channel dating back to the December highs. This channel offers room for movement in either direction and will likely contain price action for the next few weeks. Above $572, bulls retain a solid edge. Below it, their grip weakens. And under $565, control shifts clearly to the bears.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI is currently in a Bullish Trending Market State, with price closing just below resistance. There are no extended targets printing above indicating the herd is not participating in today’s market action. The MSI range is average indicating a moderate bull trend but one that needs a catalyst to push beyond $578 toward $585. Overnight the MSI rescaled higher three times and printed extended targets above allowing price to move to major resistance at $575. The MSI remained in its current state all day with a brief print of extended targets above early in the session. MSI support is currently $572.44 with resistance at $575.93.
Key Levels and Market Movements:
We stated Monday, “our model is forecasting choppy price action on Tuesday”. We further stated, “its highly likely price attempts to move higher on Tuesday”, and finally we stated, “our general lean for Tuesday is for SPY to backfill overnight but attempt to move above $575”. With our plan in hand, at the open and with price already testing and failing to break $575, we looked for a long trigger to retest MSI resistance. The premarket report had identified $574 as viable support so at 10 am ET, we entered long on a double bottom at this level looking to scalp $1 to $575. We got there before 11 am and took first profits hoping for a short to exit and reverse on the failed breakout at 10:54 am. With extended targets above the MSI we waited for the all clear and reversed short at $575.90. Given this was MSI resistance, we went back to our premarket model and established a first target at $574. While it took some time for price to reach this level, we took first profits at $574 midafternoon and decided the choppy, range bound conditions without extended targets and a nonexistent trend was simply not worth trading. We closed our remaining short at $574 at 2 pm and called it a day. While there was a late day rally back to $575.90, we didn’t think the risk was worth the reward, deciding to keep our powder dry for another day. A two for two day with small profits but enough to keep us solidly in the green for 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:
Wednesday has no material economic news, but like yesterday, 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 again on Wednesday. With the MSI in its current state, its highly likely price attempts to move higher on Wednesday. As long as $572 holds, the market moves toward $580 where it likely pauses, dips, and then moves toward the $585 DMZ. Below $572 the bears will attempt to move prices lower. But $565 is the level below which the bears will come to life. Above $565 and the bulls certainly have the short term advantage. Should $565 fail the market moves much lower. Therefore our general lean for Wednesday is for SPY to chop around overnight in a tight range but attempt to move beyond $575. There is a heavy wall of resistance which weakens with each progressive push toward $580. Above $580 price will move to $582. There remains no real bear case for tomorrow until price breaks $572. Watch the MSI closely and be careful to trade with the trend above $572. 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 weak in the near term and long trades above $572 are favored over shorts. Below $572 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 $576 to $582 and higher strike Calls. This implies the Dealer’s belief price may stagnate at the current levels and not move materially higher on Wednesday. Dealers are waiting on GDD and PCE data to initiate larger near the money positions. To the downside Dealers are buying $575 to $555 and lower strike Puts in a 3:1 ratio to the Calls they are selling, implying a slightly bearish posture for Wednesday. This positioning has changed from neutral to slightly bearish.
Looking Ahead to Friday:
Dealers are selling $576 to $590 and higher strike Calls indicating the Dealers do not have a lot of confidence prices will rise beyond $580 by Friday. To the downside, Dealers are buying $575 to $525 and lower strike Puts in a 3:1 ratio to the Calls they are selling, reflecting a slightly bearish view for the week. Dealer positioning has changed from bearish to slightly bearish. Dealers are still prepared for April 2nd tariffs but seem to be showing a bit less concern as we head into Friday. Our model sees prices in April moving higher but 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
The market was stuck today in a very narrow range after breaking out of the prior $560 to $570 range. The market is in consolidation mode and is filling in a new, narrow range between $572 and $578. As volume is absorbed, price will breakout of this tight range. Unless an external catalyst derails the current three day rally, the breakout will be higher to $585. We anticipate chop on Wednesday therefore advise remaining 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. Like yesterday, 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!
