Last week, one of the two bounce scenarios I outlined played out nearly perfectly. The SPDR S&P 500 ETF (SPY – 614.91) bottomed out on Monday as it neared the 590-strike and ultimately held that critical 595-strike put level. It even managed to close back above the 600-strike call level that I highlighted as a potential squeeze trigger. Sure enough, the very next day we gapped higher, as tensions eased in the Middle East on reports — later confirmed — of a ceasefire between Israel and Iran.
Looking a little deeper, the current SPY open interest for this week shows a large concentration at the 595-strike put — nearly spot on with Friday’s close. If that level breaks, it could trigger a delta hedge unwind, pushing the market toward the 579–580 put strikes. That zone is notable, too, as it lines up with the 200-day moving average, the Election Day close, and would likely be the next spot where bulls attempt to step in if 595 or 590 fail to hold. Overhead, we’re still capped by the 600-strike peak call, which also serves as a balance point for open interest and is right near the flattening 10-day moving average. That’s your level to watch for any upside breakout. If cleared, a test of previous all-time highs becomes more likely, with established resistance in the 608–613 zone.
- Monday Morning Outlook, June 23, 2025
From there, the breakout picked up steam. The S&P 500 Index (SPX – 6,173.07), Nasdaq Composite (IXIC – 20,273.46), and Vanguard Total World Stock Index (VT – 128.00) all pushed to fresh all-time highs. The latter had already pulled back and retested its breakout level successfully, which is a healthy sign of strength moving forward. It’s hard to ignore the resilience of global equities here, rallying in the face of geopolitical risk, political uncertainty at home, and generally cautious positioning — particularly among institutional investors. We’re now in clear blue-sky territory, and when that’s the case, price tends to climb the wall of worry.
Considering where this move may ultimately extend, I prefer to keep it simple and anchor to the 161.8% Fibonacci extension. Using the defined move from the February high to the April low, this projects an SPX upside objective near 6,958. And while the third year of a bull market is historically more choppy than the first two years, I don’t think it’s unreasonable to believe we could reach that 6,958 milestone before year-end, barring a major negative macro catalyst that disrupts the trend. A re-escalation in the Middle East, renewed tariff pressures, another round of sticky inflation, or a left-field catalyst could always change the equation. But you can’t trade on “maybes” — you follow price.
Strategists, meanwhile, might need to play catch-up. Many were forced to downgrade targets following the initial White House tariff announcement, but the rollback has thrown them offside. Goldman Sachs still has a 5,700 year-end target, even though it raised its 3-month view to 5,900 — which the market blew through. Barclays trimmed to 5,900, Oppenheimer cut from 7,100 to 5,950, RBC went down to 5,500, and UBS dropped to 5,800. The rollback has left them flat-footed, and unless this breakout fails soon, the only move left for them is to chase. If the trend holds, we’re likely to see a wave of upward target revisions heading this summer.
That said, if this breakout fails, a move back below 6,147 is where I’d start to get cautious — at least in the short term — as it would likely open the door for a retest of the 20 or 30-day moving average. And as we know, failed moves often lead to fast moves, and a breakdown below that level could serve as an early warning sign of a potential deeper move lower.
Seasonally, we now enter what is — believe it or not — the most bullish month of the year. Since 1928, July has overtaken December for that title, thanks in part to last year’s gains. I know I probably sound like a broken record every time I fill in around this time, but seasonality matters — not just because it tells us when to lean in, but because when it fails, it can leave a lot of traders offsides and scrambling.
Early July is particularly strong. Since 1928, the S&P has averaged a +1.28% gain through July 15th. After mid-month, the pace tends to flatten, with the full-month average at +1.25% per LSEG Eikon data. But in more recent history, the 10-year average mean gain for July is a solid +2.91%. Still, it’s worth noting that post-OPEX tends to be a bit more volatile and choppy.
Now let’s take a look at the current open interest setup heading into July OPEX. The SPY shows a balanced zone around the 600 level, with a peak put at the 590-strike and a peak call at 620. SPY closed Friday just below 615. If we break through the 620-call wall, the next key level to watch is 630, which is more prominent post-OPEX, though open interest at that strike could start to build in the July standard expiration if price continues to push higher.
Also worth noting: the 620-strike call is the largest for this week’s expiration, making it a short-term pivot to monitor if reached. On the downside, the loss of the 590-strike put support after OPEX is something to keep an eye on — especially if sentiment shifts and we don’t see put open interest begin to stack at higher strikes. As it stands, positioning looks supportive into mid-month, but more cautious beyond July 15th.
Not much has changed on the sentiment front, but two signals stood out. First, the 10-day buy-to-open put/call ratio has turned lower after peaking near 0.6. While it never reached full-blown fear levels, the recent rollover suggests bears may be backing off — creating a potential near-term tailwind for equities.
Second, the Advance-Decline Line for the S&P 500 broke out to new highs back in April — well ahead of the index itself. After consolidating since mid-May, it cleared that range heading into this past weekend and has now pushed to fresh highs once again. When the A/D Line is breaking out alongside price, it’s hard to get too bearish — and until that relationship reverses, the broader trend remains to the upside.
In all, equity markets are positioned to push higher into mid-July. Short-term trades worked well last week for those targeting the key support levels that were mentioned. Hedges should have been disposed of on the breakout above SPY 600 and the 10-day moving average. Price action once again dictated the path — and for now, that path remains higher. Yes, unknowns always linger in the background. But if bulls can defend this breakout, animal spirits could stay alive into OPEX. If we lose it? Then it’s time to reassess.
Until then — stay tactical, stay aware, and I’ll catch you next time.
Matthew Timpane is Schaeffer's Senior Market Strategist
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