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Good Wednesday morning!
Volatility didn't disappoint yesterday and many people were shocked by the price action, just like our friend above! I warned that some people should sit on their hands, but for those who paid attention to the important levels and targets, it was a very good day! The initial drop looked like the bears were going to rule the entire day but that wasn't the case! Buyers came in and took price back over some VERY important "key" levels and upper targets were nailed!!! Today, expect even more volatility!!
As mentioned yesterday, President Trump's "Liberation Day" tariff announcement will be released at 4:00 PM EST, right after the market closes. I really don't like when companies or the FED or major political announcements are made after the close, but that is just something we have to deal with today! Markets are already selling off during the overnight session and we are hitting overnight lows as we speak!
Again, traders and investors are bracing for uncertainty and risk off continues. In case you missed it yesterday, here are a few concerns surrounding Trump's "Liberation Day" Tariff Announcement and why there is so much volatility in the markets currently:
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 far as today, I will repeat myself that some people may want to sit this one out again as things can get crazy. However, for those who want to trade this market, there are some very key levels and targets that can be traded.
In the profile pic and key levels below, we are trading near the overnight lows at 5612, already hitting our downside target range of 5615-5600, on inventory that is almost 90% net short. It is not a true gap, meaning we are not outside of prior day's range, so we might be in for a fade higher to balance out the net short inventory. If price can stay above the target range of 5615-5600 after the bell rings, then the trade I would look for would be long over a first five or fifteen minute high, then look for 5635.75 which is Value Area Low then 1/2 back at 5647. As always, if the move does start to fade higher, remember to always trail your stop up to take risk off the table.
Now IF sellers keep price below the first 5 or 15 minute high, and if 5600 gets taken out, then look for lower targets at 5575-5565 then possibly even Monday's low at 5533.75. Futures are trading at 5623 at the time of this writing.
VPOC Update: No new VPOC's added or taken out yesterday. We still have 6 above and 21 below.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5690 - 5700
Key Levels: 5635.75 Value Area Low then 5647 1/2 Back
downside target is: 5615 - 5600 then 5575-5565
/NQ upside target is: 19,750 - 19,800
Key Level: 19,414 Value Area Low then 19,452 1/2 Back
downside target is : 19,300 - 19,250
/RTY upside target is: 2040 - 2050
downside target is: 2000 - 1990
Economic Data: Red /Green Star Event Today
Motor Vehicle Sales
MBA Mortgage Applications @ 7:00 AM ET
ADP Employment Report @ 8:15 AM ET
Factory Orders @ 10:00 AM ET
EIA Petroleum Status Report @ 10:30 AM ET
Treasury Buyback Announcement @ 11:00 AM ET
Treasury Buyback Announcement (Preliminary) @ 11:00 AM ET
4-Month Bill Auction @ 11:30 AM ET
Treasury Buyback Results @ 2:00 PM ET
Adriana Kugler Speaks @ 4:30 PM ET
More Color....... By Analyst Rich Rickus
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/ES - Key Demand $5600 then at $5660 with Supply at $5790-85 above $5840- 5820
Bullish : Sellers trapped above $5660 looking to play a break and retest above $5670 long targeting $5712 then $5740
Bearish : Buyers trapped below $5600 looking to play short after a break and retest below $5590 targeting $5500 then a break down into $5400s
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SPY - Key demand at then at $554-556 then at $559 with Supply above at $566-564
Bullish : Sellers trapped above $559 looking to play a break and retest from $560 long targeting $562 then a breakout mid high $564s
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 $19500 then at $19200 with Supply above at $19900
Bullish Sellers trapped above $19600 looking to play a break and retest above $19700 long targeting $19800s then a breakout back into low $19900s
Bearish Buyers trapped below $19300 looking to play short targeting a breakdown $19100s then $18900s
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QQQ - Key Demand at $465-464 with Supply at $473 then $480
Bullish Sellers trapped above $465 looking to play a break and retest from $466 targeting $468 then a breakout into low mid $469s
Bearish Buyers trapped below $465 looking to play a break and retest short from $464 targeting $463s then $461s
Also watching
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TSLA - Key Demand at $270 then at $259 with Supply above at $280-278
Bullish - Sellers trapped above $270 after a break and retest from $271 looking to play LONG targeting $274 then a breakout into $276s
Bearish - Buyers trapped below $269 after a break and retest from $268 below looking to target $265 then a breakdown into $261s
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NVDA - Key Demand at $106 with Supply above at $110
Bullish - Sellers trapped above $110 after a break and retest from $111 looking to play LONG targeting $113 then a breakout into $115s
Bearish - Buyers trapped below $106 after a break and retest from $105 looking to play short targeting $103 then breakdown into $102s
Have a great day and stay safe!!
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