Market analysis for Oct 28th, 2025

Rate cut guaranteed?

FOMC is coming up tomorrow. Markets are all but guaranteeing another rate cut is coming along with the promise of one more in Dec. Bulls are pushing us to new ATH's with a big gap up yesterday. We are in new territory here. It get a bit tougher to divine resistance zones when you're constantly hitting new ATH's.
Yesterday was disappointing for me. We bailed on our SPX before it turned red. Our scalping and gold are rolled into today. I tried a retrace setup near the end of the day on NDX that didn't work. Here's a look at my day:

I'll continue to work our scalp and gold trade today. 
​Let's take a look at the markets: Bullish bias is pretty entrenched.

Gap up yesterday morning and strength all day into new ATH's. 

​December S&P 500 E-Mini futures (ESZ25) are trending down -0.02% this morning, taking a breather after a record-breaking rally, while investors await the start of the Federal Reserve’s two-day policy meeting, a new round of corporate earnings reports, and U.S. private-sector economic data.
In yesterday’s trading session, Wall Street’s main stock indexes closed at record highs. The Magnificent Seven stocks climbed, with Tesla (TSLA) rising over +4% and Nvidia (NVDA) advancing more than +2% to lead gainers in the Dow. Also, Qualcomm (QCOM) surged over +11% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after introducing new chips and computers for the lucrative AI data center market. In addition, Avidity Biosciences (RNA) soared more than +42% after Novartis agreed to acquire the company in a deal valued at about $12 billion. On the bearish side, rare earth stocks slumped after Treasury Secretary Scott Bessent said he anticipated China would postpone the implementation of its stricter export controls on rare earths, with USA Rare Earth (USAR) sliding over -8% and MP Materials (MP) falling more than -7%.
The Federal Reserve kicks off its two-day meeting later in the day. The central bank is widely expected to deliver a 25 basis point rate cut on Wednesday, particularly after last Friday’s mostly favorable September inflation data. That would take the Fed funds rate to a range of 3.75% to 4.00%, the lowest level since late 2022. Investors will closely follow Chair Jerome Powell’s post-policy meeting press conference for clues on how far and how fast interest rates may fall from here. U.S. money markets have almost fully priced in a follow-up rate cut in December.
Third-quarter corporate earnings season is in full swing, with investors looking ahead to new reports from prominent companies today, including Visa (V), UnitedHealth Group (UNH), Booking (BKNG), United Parcel Service (UPS), and PayPal (PYPL). 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.
“With the Fed on track to cut rates, extending the run would appear to hinge on this week’s lineup of high-profile earnings releases. And it may, barring any surprises in U.S.-China trade negotiations,” said Chris Larkin at E*Trade from Morgan Stanley. 
On the economic data front, investors will focus on the U.S. Conference Board’s Consumer Confidence Index, which is set to be released in a couple of hours. Economists, on average, forecast that the October CB Consumer Confidence index will stand at 93.4, compared to last month’s figure of 94.2.
The U.S. S&P/CS HPI Composite - 20 n.s.a. will also be reported today. Economists expect the August figure to ease to +1.4% y/y from +1.8% y/y in July.
The U.S. Richmond Fed Manufacturing Index will be released today as well. Economists foresee this figure coming in at -11 in October, compared to the previous value of -17.
Meanwhile, the U.S. government shutdown has entered its 28th day, with no clear resolution in sight. The shutdown means that official U.S. economic data continue to be delayed. Allianz Research estimates that the shutdown has likely already shaved 0.45 percentage points off fourth-quarter annualized GDP growth.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.973%, down -0.58%.

​The SPX option score has climbed back to its upper range, coinciding with a strong rebound in spot prices to fresh short-term highs near 6,850. The sustained improvement in option sentiment suggests a renewed risk-on tone among market participants after weeks of consolidation.
From a short-term perspective, the recent uptick in call activity and volatility compression could indicate that traders are positioning for continued upside momentum, though the index is nearing overextended territory.
Monitoring whether the option score can stay elevated in the coming sessions will be key, a quick drop back toward neutral would hint at profit-taking or fading confidence in the current rally.

Let's take a look at the new intraday levels for our 0DTE for today on /ES. There are only three major levels I'm looking at today. 6917 is the demarcation point for bullish/bearish price action. Above is bullish. Below is bearish. 6870 is major overhead resistance with 6874 major support. 

We've got a lot of our trades already rolled into this morning so we'll work those first today. See you all in the live trading room shortly!