Market analysis for Oct. 21st, 2025

New ATH's incoming?

I was looking for a more neutral day yesterday but the bulls had other ideas. It was very bullish and we are now back within touching distance of the ATH's. We really had a good day yesterday with the exception of our gold trade that just absolutely got blown out. Gold's a tough one to trade right now. Holding our short scalp overnight helped. Here's a look at our day.

Let's take a look at the markets. Technicals are still bullish.

Those ATH's are within reach. 

​December S&P 500 E-Mini futures (ESZ25) are down -0.04%, and December Nasdaq 100 E-Mini futures (NQZ25) are down -0.08% this morning, pointing to a muted open on Wall Street after yesterday’s rally, as investors await a fresh batch of corporate earnings reports, with a particular focus on results from blue chips such as Netflix, Coca-Cola, and 3M.
In yesterday’s trading session, Wall Street’s main stock indexes closed higher. Apple (AAPL) climbed nearly +4% after Loop Capital upgraded the stock to Buy from Hold with a price target of $315, citing positive iPhone demand trends. Also, chip stocks gained ground, with ON Semiconductor (ON) and KLA Corp. (KLAC) advancing more than +4%. In addition, Cleveland-Cliffs (CLF) jumped more than +21% after the steelmaker said it was exploring methods to extract rare-earth minerals from its iron ore deposits. On the bearish side, AppLovin (APP) fell over -5% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the New York Post reported that multiple state regulators had contacted short sellers as part of a possible preliminary investigation into the company.
“We are seeing the typical seasonal volatility in October, but the recent swings have been relatively shallow by historical standards, as the buy-the-dip mentality appears to be in play,” said Rick Gardner at RGA Investments.
Third-quarter corporate earnings season is ramping up. Investors will be closely monitoring earnings reports today from prominent companies like Netflix (NFLX), GE Aerospace (GE), Coca-Cola (KO), Texas Instruments (TXN), Lockheed Martin (LMT), 3M (MMM), and General Motors (GM). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +7.2% increase in quarterly earnings for Q3 compared to the previous year, marking the smallest rise in two years.
Meanwhile, the U.S. government shutdown has entered its 21st day. The shutdown means that official U.S. economic data continue to be delayed. However, the Department of Labor has recalled a limited number of employees to release the September inflation report on a delayed basis this Friday, making a rare exception to release data during the shutdown.
U.S. National Economic Council Director Kevin Hassett said on Monday that the shutdown could end this week, boosting hopes that a prolonged and economically damaging stoppage might be avoided. He said his “friends in the Senate” thought it would be “bad optics for Democrats to open the government before the ‘No Kings’ rallies and that now there’s a shot that this week things will come together.”
Fed Governor Christopher Waller is scheduled to deliver opening remarks later today at a conference focused on payments innovation. With Fed officials in a blackout period before the October 28-29 policy meeting, Waller is likely to avoid commenting on interest rates.
U.S. rate futures have priced in a 98.9% probability of a 25 basis point rate cut and a 1.1% chance of no rate change at next week’s monetary policy meeting.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.973%, down -0.30%.

​When the next major crash hits, there will be signs, and this is one of them. The number of leveraged equity ETFs just hit a record 701. When leverage becomes a product, not a tool, it tells you where we are in the cycle…

Margin levels at new ATH. Retail investors are "All in."

​The SPX momentum score shows signs of stabilizing after a brief dip, suggesting short-term downside pressure may be easing. Price action has recovered from recent volatility, with momentum climbing back toward mid-range levels following a series of lower readings.
This rebound hints at an attempt to re-establish upward momentum, though the index remains in a consolidation phase. In the near term, maintaining this momentum recovery will be key, continued improvement could support a short-term push higher, while fading scores may indicate renewed indecision or range-bound trading.

The SPY skew chart shows a moderate call bias, with the 25D risk reversal holding near the lower end of its recent range and the 3-month percentile at roughly 42%.
This suggests that short-term sentiment has tilted slightly toward optimism, as traders appear to be favoring upside exposure following recent market volatility.
The skew’s stabilization after prior fluctuations indicates reduced demand for downside protection, aligning with a market that may be positioning for a rebound or consolidation phase rather than expecting further sharp declines.
In the short term, monitoring whether this call bias strengthens or fades could help gauge shifts in near-term market conviction.

Let's take a look at the intraday /ES levels: 6785, 6790, 6797, 6801, 6815, 6825 are resistance areas. 6761, 6750, 6735, 6720, 6714, 6704 are support areas. 

We had an excellent intro training yesterday on turning $1,000 into $100,000 through pyramiding.  On Weds. training session we'll compare pyramiding to the martingale approach. It should be worth attending. Put in on your schedule. 

I look forward to seeing you all shortly in the live trading room!