Morning Color

April 17, 2025

Good Thursday morning!

Down goes Frazier! And thanks to Fed Chair Jerome Powell's comments yesterday, down went the markets! Some excerpts from his speech yesterday....

"For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance," Powell said in a speech to the Economic Club of Chicago.

In a later question-and-answer session he noted a potentially tough situation developing in which prices are pushed higher by tariffs while growth and possibly the labor market weaken, leaving both inflation and employment further away from the Fed's desired levels.

The Fed tries to keep inflation stable at 2% while sustaining maximum employment.

"I do think we'll be moving away from those goals, probably for the balance of this year. Or at least not making any progress," due to the impact of tariffs that so far have proved larger than even the most severe scenarios in Fed planning estimates, Powell said.

Trading will continue to be volatile and tricky moving forward as we have seen huge moves, literally coming out of nowhere, as the timing of these catalysts is mostly unknown. As you can see in the profile pic below, yesterday's range was split into two distributions, as evidenced by the single prints, and we must treat each distribution as separate days!

Futures are basically in the middle of the prior day's range and within the set of single prints for now. We are also close to 1/2 back at 5325 and the POC at 5306, so this is a bit of a jump ball this morning. Use this range as we start trading today, as it will tell us who is in charge once the opening bell rings. Also, the top and bottom of the single prints are 5345 to 5318. This is another set of data points that will guide us as we move forward.

If price can stay above 5306 and 5325 and then move over 5345, then look for higher moves with targets at 5375 - 5400, then possibly 5450 - 5460. If sellers take prices lower and then get below 5306, then look for our lower targets of 5260 - 5240, then possibly 5200 - 5170. Futures are trading at 5341 at the time of this writing.

VPOC Update: A new VPOC was added yesterday above at 5430. Prior high was only 5401. We now have 8 above and still 18 below.

TARGETS AND KEY LEVELS TO WATCH:

/ES upside target is: 5375 - 5400

Key Level: 5306 POC then 5325 1/2 Back

downside target is: 5260 - 5240

/NQ upside target is: 18,650 - 18,750

Key Level: 18,590 POC

downside target is : 18,125 - 18,050

/RTY upside target is: 1910 - 1920

downside target is: 1860 - 1840

Economic Data: Green Star

\6-Month Bill Settlement