No Life of Riley in These Markets

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There’s an old saying, “living the life of Riley.” While the saying is not about me, it’s surely not about the markets right now, either.

After a better-than-expected CPI number, the ES rallied up to 5676 and then what happened? It crapped out down to 5550! What did it do after that low? The ES rallied, climbing back up to 5630.50.

This is the market we’re living in—100 to 150-point swings in the ES almost every day. After the late-day rally up to the 5635 level, the MIM report came out showing $2.5 billion to sell, and the ES dropped again, sinking down to 5595. These markets are in constant motion.

Even after some relief from the CPI report, the ES still dropped almost 100 points. I did think we were going to get a range expansion, but we stayed within the 5540-5640 range that I mentioned in yesterday’s OP.

Nvidia climbed 6.4%, trimming its year-to-date loss to 13.8%. Super Micro Computer gained 4%, GE Vernova added 5.1%, and Tesla surged 7.6%.

Is it over yet? I don’t think so but the ES has made several attempts to break 5500, and at some point, it will break out. For now, though, it remains stuck in a big, choppy range that is being held hostage by all the Trump tariff headlines.

We have the PPI number this morning. It’s usually not a market mover, but occasionally it is. If you’re a day trader and like selling the rips and buying the dips, you’re having a great time. If you’re a bull and keep thinking the ES is “going to pop 5800,” it’s been a painful trade.

The PitBull has a rule about the ES making a low on the Thursday before the March Quad Witching. This trade has worked often, but there are five trading days left after tomorrow to get to the expiration and currently, forecasting the ES that far out is a tough go. That said, the ES and NQ are extremely oversold.

Our lean: Continue selling the big rips. It’s all up to the NQ, and if you’re trading the range, buying the dip under 5550 has been working nicely. I just don’t know how long that can last.

MiM and Daily Recap

The S&P 500 futures opened the Globex session near 5580.00 and at 8:30 AM printed a 52-point candle on the cooler-than-expected CPI number.  This high print became the high for the whole day.  A modest bounce then took the market to 5645.00 around 09:30 on the open, but sellers quickly reasserted control. The most pronounced move of the morning developed later, driving the contract down to 5550.25 by 11:06—its lowest print of the regular session.

From that midmorning low, the ES rebounded sharply, gaining 76 points to reach 5626.50 just before 13:00. A brief pullback to 5600.00 at 13:03 was followed by another upswing, peaking at 5631.50 around 13:30. Yet volatility remained high. Sellers knocked prices down to 5591.75 by 14:00, but the market once again bounced back, marking a minor high of 5633.00 at 14:48.

In the final stretch of regular trading, a more defensive posture emerged as the market slipped into the close at 5602.75 and continued until 16:42 when the ES dropped to 5595.00.

Overall, the regular session settled at 5602.75, which represented a 0.48% gain (27 points)  from the prior day’s 5635.50 settlement (though it was down 0.58% from the day’s open of 5645.00). After the brief “cleanup” period, the official full‑session close printed 5597.25, a net 27‑point gain—or 0.48%—above the previous day’s final price of 5570/5580 (per the combined session reference). Volume finished solid, with over 1.45 million contracts changing hands during regular hours and total participation reaching nearly 1.85 million when including Globex and cleanup sessions. 

Overall, the market displayed choppy two‑way action, alternating between sharp dips and respectable recoveries. Early strength gave way to intraday selling, although buyers stepped in aggressively near the 5550.25 mark. Despite multiple afternoon pullbacks, the ES managed to close modestly higher on a session‑to‑session basis, suggesting a tentative bullish undercurrent. That said, the market’s inability to hold mid‑session gains near 5633.00 hinted that participants remained cautious.

Looking to the Market on Close (MOC) imbalance data, total dollar flow was heavily skewed to the sell side at −2.3 billion dollars (about 77% in sell imbalances). However, the symbol percentage metric registered −55.9 %, which, while bearish, did not exceed the ±66 % threshold that typically indicates a strong directional push. As a result, the late‑day selling pressure was noticeable but not extreme enough to drive a fresh low into the close.

In summary, Wednesday’s ES session saw significant two‑way swings, closing in positive territory versus the prior settle but below its own day’s opening price. Traders will be closely watching whether the market can break out decisively above 5645.00 in upcoming sessions or if renewed selling pressure pushes the contract back down toward 5550.25 support.

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Guest Posts:

Dan @ GTC Traders

Hedge if We Rally

We trade in a manner that has us trading a number of markets, sectors that are non-correlated to one another for purposes of diversification, risk management, and maximizing risk-adjusted returns while minimizing exposure to any single market or sector downturn.

And yet at the same time, we understand that regardless of market sector, eventually all eyes turn to stocks … or equities. And yes, the current news is the ongoing minor stock market correction.

Yes, that is how we see this downturn.

Minor.

Before the current stock market bubble began in November 2023? It was statistically normal to receive a 10% correction in stocks (which is where we are now) on average … once per year.

Yes, you heard me right. Ten percent corrections were at one time, a regular annual occurrence. It seems many in social media streams were not aware of this.

So if we are going to discuss the stock market at the current time, or the S&P 500?

We think the levels are pretty obvious at this point. We like to keep it simple. We have drawn down 10%. This level alone will bring in buyers.

If we begin to rally above that 5625 level?
It could be a headfake.

What we like to do in this case is either put on a slightly bullish relationship trade, or perhaps, a heavily hedged bullish SPY trade. In equities, this is easy enough. One could almost buy as much SH (An inverse ETF, or short the S&P 500) as one buys of SPY. Something like a 90% hedge (for every 100 shares of SPY bought, 90% of the buying power placed into SH as well). Or one could use a married option position. The point is, is that while the gains are muted, there are still gains. If the trade is a headfake then the losses will be mitigated.

If the market continues to rally, one could simply peel off the hedge at specific intervals as it becomes more clear the a rally is truly underway.

If we don’t break above 5625 with conviction and volume? No trade.

Just a little trick we like to use at key levels, to keep our risk mitigated. Since none of us truly know the future.

Until next time, stay safe, and trade well.

Trading Room News:

Polaris Trading Group Summary: Wednesday, March 12, 2025

Strong Start with CPI Release and Bullish Momentum:

Strategic Trading Throughout the Morning:

Midday Action – Profit Targets Hit & Reversals:

Afternoon Session & Closing Action:

Key Takeaways & Lessons Learned:

Overall Performance:

DTG Room Preview – Thursday, March 13, 2025

Market Overview:

Tech stocks surged after a cooler-than-expected CPI report, with Tesla (TSLA +7%) and Nvidia (NVDA +6%) leading the charge. The Nasdaq rose 1.2%, while the S&P 500 gained 0.5% and the Dow dipped 0.2%.

Trade tensions escalated as Canada imposed $21B in tariffs on U.S. goods in response to Trump’s 25% steel and aluminum tariffs. Trump vowed reciprocal action against both Canada and the EU.

Intel (INTC +11% after hours) soared after announcing former Cadence Design CEO Lip-Bu Tan as its new CEO. Meanwhile, a consortium of chipmakers—TSMC, Nvidia, and Broadcom—is reportedly in talks to acquire Intel’s chip manufacturing business.

Trump is also expected to nominate Fed Governor Michelle Bowman as the next Vice Chair for Supervision, a key banking regulatory role. The move signals potential deregulation for U.S. banks.

Earnings Watch:

Key Economic Events (ET):

Market Sentiment & Levels:

Volatility remains elevated but steady, with whale bias leaning bullish ahead of the PPI report. Overnight large trader volume was moderate.

ES price action: The market is consolidating near the center of its short-term downtrend channel, with key resistance at 5647/44, 5889/84, and 6156/51. Support levels to watch: 5524/21 and 5464/59.

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Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.

Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!