Weekly US Market Outlook – SPY, QQQ, DXY, VIX (30 NOV)Weekly US Market Outlook – SPY, QQQ, DXY, VIX
Bullet points:
Market sentiment turned bullish again as the probability of a December Fed rate cut climbed to 87%.
Fear & Greed Index recovered from extreme fear (9) to 24.
Options sentiment still signals extreme fear → room for upside continuation.
DXY remains bearish until 99, supporting risk assets.
VIX continues to decline toward 15.70–14.20, but these levels historically precede sharp corrections.
Heavy data week ahead (ADP, Jobless Claims, PCE) → major volatility drivers.
SPY targets 690 → 700 zone; QQQ targets 625 → 637 → 647.5.
Market Sentiment
Market sentiment has shifted decisively toward a bullish stance after the probability of a December rate cut surged back to 86%. Markets are now pricing in one more cut before 2026, creating a supportive macro backdrop for equities. At the same time, the Fear & Greed Index has rebounded from extreme fear levels of 9 to 24, indicating a slow but clear improvement in risk appetite.
Stronger than expected earnings from NVDA continue to reinforce the narrative that the AI cycle is intact and far from bubble conditions. Additionally, easing geopolitical tensions specifically the US–China trade agreement have reduced risk premia across global markets. Taken together, these developments support a short to mid term bullish environment and increase the likelihood of a Santa Rally.
Options Sentiment
Despite improving market sentiment, options markets remain deeply positioned in the extreme fear zone. This divergence between spot indices and options positioning typically suggests that market participants remain hedged or underexposed, allowing equities to extend higher as positioning normalizes. In other words, options sentiment indicates there is still significant room for markets to explore higher price levels.
DXY – US Dollar Index
Monitoring the DXY is essential because of its direct correlation with risk assets. A rising dollar weighs on equities, while a declining dollar supports them. The DXY was rejected at the 100.30 level and is now retracing toward the HTF Key Zone, highlighted around 99.
My base case is a move down into the 99 region, followed by short term accumulation and a potential bounce back above this level. Until DXY reaches 99, the trend remains bearish, which historically provides strong support for equities, commodities, and other USD sensitive assets.
VIX – Volatility Index
VIX, which reflects S&P 500 options based volatility expectations, has been declining since the November 21 peak, which aligned with the recent local bottom in the S&P 500. I expect VIX to continue trending lower toward 15.70 and potentially 14.20 levels previously associated with S&P 500 all time highs.
However, it is crucial to note that when VIX reaches these zones, markets often experience rapid and unexpected corrections. Therefore, while volatility compression favors short-term bullish continuation, the risk of a sharp reversal increases as VIX approaches these historically significant thresholds.
Upcoming Data Releases
A high-impact macro week is ahead, especially between Wednesday and Friday. The key releases include:
ISM Manufacturing PMI – Monday
JOLTS Job Openings – Tuesday
ADP Nonfarm Employment – Wednesday
Services PMI – Wednesday
ISM Non-Manufacturing PMI – Wednesday
Initial Jobless Claims – Thursday
PCE Inflation (September, delayed) – Friday
Michigan Consumer Sentiment – Friday
The most influential dataset will be the combination of ADP Employment, Initial Jobless Claims, and PCE Inflation. If labor data comes in stronger than expected, the Fed may interpret it as a sign of a resilient labor market reducing the need for additional cuts. Conversely, if PCE inflation comes in hotter than expected, policymakers may see it as a reason to delay cuts.
Given that this PCE print is delayed due to the U.S. government shutdown, the market reaction may be muted, but it still matters for the December policy narrative.
SPY Weekly Outlook – Prediction
In my opinion, SPY is positioned to target new all time highs early in the week. Price may first test 686, followed by a brief retracement or consolidation, and then continue higher toward 690, marking a fresh ATH. Under strong bullish momentum, SPY may extend into the 700 zone by the end of the week. These levels represent the primary upside targets I will be monitoring closely.
QQQ Weekly Outlook – Prediction
QQQ remains structurally weaker than SPY, yet it also maintains strong bullish momentum. The 617 level is a key zone for potential call entries. Price may initially target 625, where a short term rejection could occur, followed by a small pullback. Afterward, QQQ could advance toward its all time high at 637, and in a stronger continuation scenario, possibly extend to 647.5.
Conclusion
Overall, market conditions have turned constructive again. Sentiment is stabilizing, central bank expectations are supportive, volatility is compressing, and the dollar remains weak all providing a tailwind for equities. This week’s heavy macro calendar may bring volatility spikes, but unless data significantly challenges the rate cut narrative, both SPY and QQQ appear positioned to continue their upward trajectory toward new highs.
⚠️ This analysis is for educational purposes only and does not constitute financial advice. Always conduct your own research before trading or investing.
