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Good Tuesday morning!
The tariff storm clouds are rolling in! Tomorrow, President Trump's "Liberation Day" tariff announcement will be released and traders and investors around the world are bracing themselves.
After doing some research, here are a few concerns surrounding Trump's "Liberation Day" Tariff Announcement:
1. Economic Uncertainty and Market Volatility
- Global stock markets have experienced turbulence due to trade uncertainty, with mixed results in U.S. indices like the S&P 500 and NASDAQ, while Asian markets saw partial recoveries after earlier losses.
2. Potential Recession Risks
- Economists warn that aggressive tariffs could exacerbate inflation, reduce consumer confidence, and disrupt supply chains, increasing recession risks.
3. Lack of Clarity and Implementation Chaos
- Even Trump’s advisors and allies remain uncertain about the specifics of the April 2nd announcement, including which countries or products will be targeted and at what rates.
4. Consumer and Business Impacts
- Tariffs typically raise prices for consumers and squeeze corporate profits, with industries like autos and agriculture facing immediate fallout.
5. Geopolitical Strains
- Traditional allies like the EU and partners like South Korea could face steep tariffs, straining diplomatic relations.
Trump’s promise of "reciprocal tariffs" remains vague, leaving markets, businesses, and policymakers bracing for potential upheaval.
Investors fear further disruptions from new tariffs, especially after previous measures triggered market declines and erased post-election gains.
Existing tariffs on China, Canada, and Mexico have already contributed to economic strain, with retaliatory measures compounding the damage.
Past tariff roll-outs, like the abrupt 25% auto tariffs, were poorly coordinated, causing confusion among businesses and markets.
Retaliatory tariffs (e.g., China’s taxes on U.S. energy and farm goods) threaten sectors already struggling with trade disruptions.
Venezuela-linked tariffs (25% on oil/gas buyers) add another layer of complexity to global energy markets.
As you can see there is a lot to take in and this is causing massive volatility and intraday swings in the markets. Some people may even want to sit this one out as there is nothing wrong with sitting on hands. That being said, yesterday we got the bounce we were looking for as our target area held very well. Lower target in the ES was 5545-5535 and yesterday's low was 5533.75. At that point, it showed sellers were drying up and we looked for higher prices. Up we went and even our upper targets were taken out. Now that was fine for yesterday but today is a bit more 'dicey"!
In the profile pic and key levels below, we are in the lower 1/2 of the overnight range and the ON low was right at the bottom of the single print range at 5617. If this low can hold then price may move back towards 5640 (which is very key today) then 5655.75 which is the POC then upper targets. If sellers take price below 5617 then look for lower targets at 5590-5580 then possibly 5565 then 5535. Futures are trading at 5630 at the time of this writing.
VPOC Update: As mentioned, 5578.50 was in play and taken out yesterday. We now have 6 above and 21 below.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5685 - 5695
Key Levels: 5617 ON Low then 5640
downside target is: 5590 - 5580
/NQ upside target is: 19,640 - 19,670
Key Level: 19,309 - 19,410
downside target is : 19,185 - 19,145
/RTY upside target is: 2045 - 2055
downside target is: 1990 - 2005
Economic Data: Red /Green Star Event Today
4-Week Bill Settlement
8-Week Bill Settlement
4-Month Bill Settlement
PMI Manufacturing Final @ 9:45 AM ET
ISM Manufacturing Index @ 10:00 AM ET
Construction Spending @ 10:00 AM ET
JOLTS @ 10:00 AM ET
Treasury Buyback Announcement (Preliminary) @ 11:00 AM ET
4-Week Bill Announcement @ 11:00 AM ET
8-Week Bill Announcement @ 11:00 AM ET
4-Month Bill Announcement @ 11:00 AM ET
6-Week Bill Auction @ 11:30 AM ET
More Color....... By Analyst Rich Rickus
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/ES - Key Demand $5590 with Supply above $5680
Bullish : Sellers trapped above $5680 looking to play a break and retest above $5685 long targeting $5705 then $5720
Bearish Buyers trapped below $5660 looking to play short after a break and retest below $5650 targeting $5620 then a break down into $5590s
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SPY Key demand at $556 with Supply above that at $560-561
Bullish Sellers trapped above $560 looking to play a break and retest from $561 long targeting $561 then a breakout mid high $563s
Bearish Buyers trapped below $556 after a break and retest below $555 targeting $554s then a breakdown into $553s
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/NQ Key demand at $19250-60 with Supply above at $19600 -19500
Bullish Sellers trapped above $19620 looking to play a break and retest above $19650 long targeting $19800s then a breakout back into low $19900s
Bearish Buyers trapped below $19200 looking to play short from $19280-90 targeting a breakdown into $18975 LOD then $18800s
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QQQ Key Demand at $466 with Supply at $470-469
Bullish Sellers trapped above $470 looking to play a break and retest from $471 targeting $473.10 then a breakout into low mid $474s
Bearish Buyers trapped below $464 looking to play a break and retest short from $463 targeting $462s then $461s
Have a great day!!
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