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

Continue Reading:

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Subscribers to Schaeffer's Weekend Trader options recommendation service received this UPST commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Fintech stock Upstart Holdings Inc (NASDAQ:UPST) is breaking above its June closing highs, as well as its 200-day moving average and year-to-date anchored volume-weighted average price (AVWAP). Earlier this week, the shares bounced near peak put open interest at the 50-strike, and are now breaking above the $55 pivot point from a November earnings gap. This area acted as support in January, then resistance in March and May, and could be a key area moving forward.
 

The 65-strike call dissipates next week, which could open the doors to much higher prices heading into July. And with more than 25% of UPST’s total available float sold short, shorts have started covering for the last month and could continue to get squeezed.
 
Options traders are in luck. The security's Schaeffer’s Volatility Index (SVI) sits in the 10th percentile of its annual range, so premium can be had for a relative bargain. 

 

Our recommended call has a leverage ratio of 3.7 and will double in value with a 29.1% move in the underlying equity.

Shares of MP Materials Corp (NYSE:MP), the U.S.’ leading rare-earths producer, are down 7% to trade at $33.45 at last check after the U.S.-China trade deal. China accounts for a large portion of the globe's rare earth mining, and more importantly, 90% of rare earth processing capacity globally, which is why MP Materials stock enjoyed tailwinds from tariffs against the country. 

On the charts, the shares are pulling back from a June 18, two-year high of $39.10. Today's drop has the equity falling below the 10-day moving average, which supported it during its recent rally, though it still sports a roughly 115% year-to-date lead. MP seemed due for a short-term dip, too, per its 14-day relative strength index of 75.6 that sits in "overbought" territory. 

Put traders are chiming in on today's price action. So far, 8,102 puts have been exchanged, which is triple the put volume typically seen at this point. The two most popular contracts are still the January 2026 55- and 42-strike calls, but the next six most active are puts, starting with the weekly 6/26 34.50-strike put.  

Interestingly enough, short interest has been building despite the recent outperformance, and now represents 23% of the stock's available float. It would take shorts over three days to cover their bets, at MP's average pace of trading. 

Trade Desk Inc (NASDAQ:TTD) stock is 3.2% higher to trade at $70.21 at last check, after Evercore ISI Group upgraded the cloud computing company to "outperform" from "in line." The analyst in coverage cited the equity's attractive valuation and improved risk-reward ratio.

The majority of analysts leaned bullish coming into today, but there's room for additional upgrades that could further boost the security. Of the 36 firms in question, 10 still carry a "hold" rating. 

TTD now sports a 27.3% quarter-to-date lead, but has shed 40.8% so far in 2025. Shares have struggled with overhead pressure at $80 since February, but have remained above the $60 region since an early May bull gap, with additional support stemming from their 60-day moving average.

Options are looking quite affordable. The stock's Schaeffer's Volatility Index (SVI) of 41% sits in the 11th percentile of its annual range, indicating options traders are now pricing in low volatility expectations. Plus, its Schaeffer’s Volatility Scorecard (SVS) score of 86 out of 100 indicates TTD has historically delivered larger-than-expected price swings.

Nike Inc (NYSE:NKE) is the best Dow stock by far today, last seen up 14.8% to trade at $71.85. The retail giant reported adjusted fiscal fourth-quarter earnings of 14 cents per share on $11.10 billion in revenue, both of which topped analyst estimates, and is headed for its first positive post-earnings session in seven quarters. Nike said the worst effects of turnaround efforts are over, but did estimate that the cost of tariffs could be $1 billion in the current fiscal year.

Analysts have jumped on NKE in response. At last check, there were 10 price-target hikes, the highest coming from Evercore to $90 from $75. HSBC chimed in with an upgrade to "buy" from "hold" as well. 

The report is so stellar that its offering a halo lift to retail sector peers Lululemon (LULU), Deckers Outdoor (DECK), and VF Corp (VFC). Retail exchange-traded fund (ETF) SPDR S&P Retail ETF (XRT) is up 1% as well.

This is poised to be Nike stock's best single-session gain since December 2022. The shares are breaking out of months-long consolidation, trading at their highest level since a March 21 post-earnings bear gap of 5.5%. Keep an eye on NKE's 200-day moving average, a trendline getting tested today amid the melt-up. Year-to-date, the equity is now down only 5%.

Options traders are responding in kind. At last check, over 271,000 calls have already changed hands this morning, volume that's 22 times the average intraday amount and more than double the number of puts traded. The weekly 6/27 70-strike call is the most popular, while the August 60 calls are also a top trade.

Nike has consistently exceeded options traders' volatility estimates, as reflected in its Schaeffer’s Volatility Scorecard (SVS) score of 82 out of 100. In other words, the security has historically delivered larger-than-expected price swings.

Micron Technology Inc (NASDAQ:MU) stock is 1.7% lower to trade at $125.06 at last check, despite the chipmaker's fiscal third-quarter earnings and revenue beat. The equity also saw no fewer than 16 price-target hikes in response, including one from Rosenblatt to $200 from $172.

Analysts leaned optimistic coming into today, making this wave of bull notes even more impressive. In fact, 26 of the 30 firms in coverage sport a "buy" or better rating, while the 12-month consensus price objective of $137.40 is a 7.7% premium to MU's current levels.

MU earlier hit a new year-to-date peak of $129.85 before reversing gains, but a newfound floor at the $120 level looks ready to contain the pivot. Shares boast a 50.8% year-to-date lead and remain well on their way to a healthy weekly gain, despite being on track for their third daily drop in four.

Options traders are chiming in, with 139,000 calls and 97,000 puts exchanges so far today, which is 5 times the volume typically seen at this point. Most active is the weekly 6/27 130-strike call, where new positions are being opened.

Micron stock has consistently exceeded options traders' volatility estimates, as reflected in its Schaeffer’s Volatility Scorecard (SVS) score of 96 out of 100. In other words, the security has historically delivered larger-than-expected price swings.

Super Micro Computer Inc (NASDAQ:SMCI) stock was last seen 5.4% higher to trade at $49.14, brushing off Keybanc's new "sector weight" rating, with the analyst in question highlighting competitive pressure in the artificial intelligence (AI) space. The company also announced plans to issue $2 billion in convertible notes earlier this week.

SMCI is seeing the most options volume in the options pits today, with 609,000 calls and 131,000 puts traded at last glance, which is triple the intraday average volume. The most popular contract by a long shot is the weekly 6/27 50-strike call, where new positions are being opened. 

Options traders have been much more bullish than usual of late. This is per the stock's 50-day call/put volume ratio of 2.85 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than all other readings from the past year.

These options are looking quite affordable. Super Micro Computer stock's Schaeffer's Volatility Index (SVI) of 69% sits in the 5th percentile of its annual range, indicating options traders are now pricing in low volatility expectations. Plus, its Schaeffer’s Volatility Scorecard (SVS) score of 83 out of 100 indicates the equity has historically delivered larger-than-expected price swings.

The shares are on track for their fifth gain in the last six sessions, as well as their third consecutive pop. Despite a steep 40.9% year-over-year deficit, the equity already rose 61.1% in 2025, and is today looking to close above the $50 level for the first time since February.