For this coming week, SPX is facing a clear expansion of volatility. The expected move for this week is 104.04, just shy of a 2% move. This is a pretty significant increase from the 82-point expected move last week and the 89-point expected move from 2 weeks ago.

SPX closed last week at 6040.53, down about just 1% or 60.71 points. Despite seeing an “inside” move, we are still seeing a huge expansion of volatility. The expected move is about 25% larger for this coming week than it was the week prior. This is a pretty large increase.

You can see per the labels that the upper end of the range would put us at 6144.57, which would also be a new all-time high. The lower end of the range puts us at 5936.49, which puts us below the low of last Monday’s “deepseek crash.”

We have seen breaches of the expected move for a couple of weeks in a row now, which signifies an inefficient market. This puts pressure on market makers to bring the market to a more efficient cycle. However, I expect this inefficiency to continue, and I am expecting another breach of the expected range. The trend has been to the downside so I will stick to that being my prediction for the week. Whether or not we close outside the range is unknown, but I am certainly expecting a breach outside of it early this week.

Last week I shared a chart of the VIX, showing how it has been contracting despite consistent breaches of the expected move to the downside. The VIX on a closing basis did not move much this week, despite breaking over 22 on Monday. We closed the week at 16.43.

VIX is caught in a weird spot right now. We are holding the levels of the grey box but also seem to be having trouble going above 23. If we see the VIX break that red line, I expect a huge spike and possible sell off in the SPX. The market is still very complacent despite the geo-political and economic uncertainty from tariffs etc.

The bond market is also in a weird spot where it is selling off despite uncertainty in the equity markets and risk of inflation coming back around. If the bond market is to take off to the upside, I expect weakness in equities to continue.

The big MAG7 earnings for this week are GOOGL and AMZN. While they are not market leaders like AAPL or MSFT, they can still have a pretty significant impact on SPX and NDX.

Looking at GOOGL first, it finally broke out of the rising wedge it was in for quite some time. We actually broke out of the range, closed outside of it and have continued to rally in a week where the rest of the NDX was struggling to catch an uptick.

GOOGL remains strong and seems to be a stock where money is pouring into. Money is rotating out of stocks like NVDA and MSFT and into stocks like META and GOOGL. MSFT showed some weakness in cloud growth on its earnings, and the 2 biggest competitors in that space happen to be GOOGL and AMZN. Is the business that MSFT potentially lost going to these 2? I guess we will find out with the earnings but watch for GOOGL to be strong heading into this week.

AMZN also rallied this week and showed strength while SPX and NDX did not. AMZN also made new all-time highs this week along with GOOGL and META.

If the rotation out of semi-conductors continue, AMZN could continue to rally as well. The risk is definitely to the upside on AMZN.

The honorable mention for this week is going to be PLTR. They have earnings on Monday, and surprisingly it could actually set the tone for tech stocks this week. This is a stock with a cult-like following that has had an absolutely explosive exponential move over the past year or so. It re-tested the all-time highs this week, in fact is just squeaked in a new high. PLTR is bringing AI to the government and lots of other similar industries like defense etc.

Despite trading at a 417.21 PE ratio, this stock has some very positive community sentiment. People love the stock and the expectation from the trading community is that it keeps going. I wanted to just throw it out there as something to think about. I don’t necessarily have an opinion on it but will be interesting to watch though.

Market sentiment for this week has seen an uptick towards the bearish side of the meter. This is largely due to tariffs and a possible trade war. As of this post, there is still a few hours until the futures open but over the weekend we saw crypto sell off hard. I would not be surprised to see a huge gap down once the futures open. Whether this time it holds or not will be the question.

It will certainly be another interesting week! Good luck!