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From NAFTA to Nosedive: Echoes of 2018 in Today’s Market
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Our View
The markets are being dominated by Trump’s tariffs. Forget the recession—a larger crisis than the 2008 credit collapse is coming, and it’s going to take the world for a ride. The uncertainty in the marketplace is at an all-time high, and you don’t need a PhD to figure that out.
After 30 years of piling on debt, the government is stuck between a rock and a hard place. Do nothing and pay billions a month just on the interest of the deficit? According to the Joint Economic Committee, the U.S. government pays an average of $20.41 billion in interest on its debt each month. This is based on an average interest rate of 3.347% on the total marketable national debt, as of March 2025. The total amount of interest paid to trust funds over the past 12 months was $244.91 billion.
I get it—he wanted to “drain the swamp” during his first election, but the Democrats kept blocking him. Now the Republicans control both the Senate and Congress, and he’s running amok. Is he playing poker with the world? It sure seems that way and Europe, Canada, Mexico, and China are not budging. In fact, the China situation is reaching a boiling point.
There is zero doubt that global trade will fall this year. The WTO sees a decline in trade flow and has warned against the spreading conflict, noting that drops in trade flows of this size are usually associated with major shocks. Much of this year’s decline is expected to impact North America.
I don’t know how this is going to end up, but I think we’re in for some shock and awe. I asked Grok on Twitter what the odds of a 2025 credit crisis were, and it said the “likelihood of a credit crisis” appears significant—between 50% to 60%. Will it happen? I think the odds are higher, but what do I know?
Our Lean
We have four economic reports, one Fed speaker, and earnings from UNH & BX. Yesterday, Powell said during a speech in Chicago that the central bank will “wait for greater clarity” before considering any interest rate adjustments. He also said he expects Trump’s tariffs to generate “higher inflation and slower growth.”
I think the Fed is so far behind the eight ball that Powell & company don’t even know what to say. I don’t doubt that, at some point, they will try to lower rates—and I think the markets will crash. This is a pain game, and we’re just in the early innings.
The market can run but not hide. Yesterday, Meta (META), Microsoft (MSFT), Amazon (AMZN), and Apple (AAPL) were all down more than 3%. Tesla (TSLA) shares were lower by more than 5%, and Nvidia (NVDA) fell 7%—wiping out $5 billion in market cap. I think this sell-off is as real as it gets, and I also don’t think it’s even close to being over.
I know this is a long shot, but ES 2900 on August 28, 2018, was a big level. It was when the U.S. and Mexico reached a trade deal that would replace the North American Free Trade Agreement (NAFTA). The talks excluded Canada—and guess who was threatening tariffs on their cars if they refused the deal? TRUMP!!!!!!
Our lean: that was an ugly sell-off yesterday—but so was the LDR (late day rip). When the futures close like that after a big sell-off, they usually bounce. I’m not saying you can’t play the long side, but the percentages favor shorting the rips isn’t working anymore meaning a 5- to 8-day rally, which I just don’t see happening.
Can we short-cover 100 to 200 points? Sure. But eventually, it will end up like all the other dead cats—going right back down.
I don’t want to fade HandleStats, but if the ES and NQ gap sharply higher, I’ve gotta sell the open but ideally I want to buy the pullbacks. @TradersAlmanac says the Thursday expiration has the Dow up 19 of the last 28 occasions and the Nasdaq up 21 of the last 23 before Good Friday.
The volume will thin out, this is one of the last weekends of spring break. Combine the recent sell-off with expiration, and we could see some buying.
Here is a study from @HandelStats:
Market Seasonality Spotlight
S&P 500 E-mini Futures (ES) – The Thursday Before Good Friday
Source: HandelStats.com | 2008–2024
As traders gear up for the long Easter weekend, historical trends around the Thursday before Good Friday reveal a consistent seasonal bias in the S&P 500 E-mini Futures (ES).
🧾 17-Year Historical Breakdown
📅 Period Covered: 2008–2024
📊 Total Trading Sessions: 17
Outcome
Count
Probability
🟢 Up Days
12
70.59%
🔴 Down Days
5
29.41%
⚪ Unchanged
0
0.00%
📈 Performance Snapshot
-
Average Gain on Up Days: +1.00%
-
Average Loss on Down Days: −0.42%
-
Overall Average Return (All Sessions): +0.58%
🔍 Key Observations
The Thursday session before Good Friday shows a clear bullish tilt, with nearly 3 out of every 4 sessions closing higher.
Standout years include:
-
2009: +3.65%
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2021: +1.26%
-
2018: +1.10%
The most notable down year:
-
2022: falling −1.20%
⏱️ Timing Matters
All sessions studied occurred on a Thursday, as markets are traditionally closed on Good Friday.
📌 Takeaway
Traders may want to factor in this bullish tendency when planning positions around the Easter holiday period. As always, seasonality should be considered alongside broader market context and technical levels.
Good Friday Holiday Trading Schedule – 2025
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Thursday, April 17, 2025: All CME markets have a regular close.
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Friday, April 18, 2025: No CME trading in observance of Good Friday.
MiM and Daily Recap
The Globex session opened at 5403.75 but trended lower through the night, ultimately printing a low of 5340.00 just before the open. The regular session began at 5367.25 and initially saw a quick surge, reaching 5388.75 at 9:36 AM before pulling back sharply to a morning low of 5346.00 at 10:00 AM—a 42.75-point drop (-0.79%).
Momentum shifted strongly bullish into mid-morning, with buyers lifting the ES to the session high of 5401.00 at 11:24 AM, marking a 55-point recovery (+1.03%) from the morning low. However, the upside was short-lived. A broad-based decline emerged and persisted into midday, dragging the index down to 5356.50 by 12:06 PM.
A minor bounce lifted prices to 5370.25 at 12:33 PM, followed by another lower high at 5366.50 around 1:21 PM, confirming a pattern of selling strength. The downtrend deepened into the early afternoon, with a fresh intraday low of 5287.25 printing at 1:57 PM—representing a 79.25-point slide (-1.48%) from the prior swing high.
A late attempt to stabilize took the ES up to 5317.00 by 2:24 PM, but this rally proved unsustainable. The market once again sold off into 3:27 PM, bottoming at 5251.00, the day’s lowest print. A final push into the close saw the ES bounce to 5316.50 by 4:13 PM. The 4:00 PM settle was 5305.25.
From a session-to-session perspective, the ES lost 122.50 points on the day, a 2.26% decline from Tuesday’s 5427.75 cash close. The regular session’s open-to-close move was -62.00 points (-1.16%), and the combined full session printed a 104.25-point drop (-1.93%) from the overnight open to the 5:00 PM final print of 5299.50.
The tone was decisively bearish throughout Wednesday’s trade. While the initial morning bounce gave some hope for bullish continuation, the lower high pattern from midday through afternoon confirmed that sellers were in control. The session was marked by aggressive liquidation, evident in the consistent series of lower highs and lower lows.
Volume was robust, with the full session logging 1.48 million contracts and over 1.13 million during the regular trading hours alone—reflecting strong conviction behind the selling. The day’s steep losses were broad-based, with equities under pressure amid tariff-driven macro concerns and Fed commentary warning of potential inflation risks.
Technical Edge
Fair Values for April 17, 2025
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S&P: 29.97
-
NQ: 120.49
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Dow: 175.87
Daily Breadth Data 📊
For Wednesday, April 16, 2025
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NYSE Breadth: 99% Upside Volume
-
Nasdaq Breadth: 79% Upside Volume
-
Total Breadth: 87% Upside Volume
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NYSE Advance/Decline: 94% Advance
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Nasdaq Advance/Decline: 84% Advance
-
Total Advance/Decline: 89% Advance
-
NYSE New Highs/New Lows: 8 / 752
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Nasdaq New Highs/New Lows: 26 / 835
-
NYSE TRIN: 0.24
-
Nasdaq TRIN: 1.40
Weekly Breadth Data 📈
For the Week Ending Friday, April 11, 2025
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NYSE Breadth: 34% Upside Volume
-
Nasdaq Breadth: 42% Upside Volume
-
Total Breadth: 39% Upside Volume
-
NYSE Advance/Decline: 7% Advance
-
Nasdaq Advance/Decline: 14% Advance
-
Total Advance/Decline: 11% Advance
-
NYSE New Highs/New Lows: 106 / 1,073
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Nasdaq New Highs/New Lows: 150 / 1,682
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NYSE TRIN: 1.13
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Nasdaq TRIN: 0.96
Guest Posts:
Dan @ GTC Traders
Upside Volatility and Linear Assumptions During Tail Risk-Off Events
This week, we thought we would do something a little different for our “GTC Traders Guest Post”.
We are going to share an entry that we did for GTC Traders Premium Members. We have noticed … some very intelligent people referring to data entry points such as “Forward P/E’s” … “Dividend Discount Models” … “GDP Quarterly Growth” …
In this environment? Such approaches are completely … and utterly worthless. We describe why … and why such assumptive models are the very reason we ran into the 2008 meltdown. You can find those thoughts in the following video entry …
or …. https://www.youtube.com/watch?v=7yp3qlJZ_Z8
Until next time, stay safe and trade well …
Trading Room News:
Polaris Trading Group Summary: Wednesday, April 16, 2025
Yesterday was a high-volatility, education-rich session in the PTG trading room, headlined by sharp downside price action and a rare late-session twist. Here’s a breakdown of how the day progressed:
Pre-Market Prep & Strategy
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Line in the Sand (LIS) was set at 5415, with the bear scenario eyeing a move down into the 5375–5360 zone. David highlighted that the overnight price had already fulfilled this lower target zone, laying the groundwork for potential intraday continuation.
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Members were reminded of VIX option expiry at the cash open, often a source of volatility. Educational resources were shared, including insights from Yumi Sakura’s trading psychology material.
Morning Session: Choppy Action with Bearish Undertone
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Market action in the morning was hesitant, with bulls trying to hold levels like 65/75/85 but lacking conviction.
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David called out that Cycle Day 1 Target Zone (5350–5337) was achieved with ultra precision, a great example of the statistical edge in action.
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Crude Oil (CL) trades performed well:
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CL OPR LONG TGT 1 & 2 were filled, with stops trailing out later in the morning.
-
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The ES/NQ were stuck in chop, leading to comments like “ChoppingWood” and members feeling like they were getting “chopped.”
Midday to Powell: Breakdown Accelerates
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Around 1:30 PM, Fed Chair Powell’s comments added fuel to the bearish fire:
-
Markets reacted swiftly, with the S&P 500 dropping 3% and NASDAQ 100 nearly 3% down as well.
-
David confirmed that both Cycle Day 1 Violation and Average Decline targets were fulfilled, reinforcing the precision of PTG’s statistical tools.
-
-
A humorous but insightful “Soap Bar Bull” image captured the mood — bulls couldn’t hold onto any traction.
Late Session: Capitulation and Surprise Reversal
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As price pushed lower toward the CD1 Average Decline Statistical Low (5245), it seemed like the selling had no end.
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But in a surprise twist, a $2.2 billion MOC Buy Imbalance sparked a short squeeze into the close.
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David noted: “Longs saved by the MOC Buy Imbalance…Shortie got trapped”
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A dramatic reversal, turning a day of pressure into a final hour of opportunity.
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Key Takeaways & Lessons
Statistical Targets Worked Beautifully – CD1 zones and average decline levels were hit with near-perfect accuracy.
CL Trade Management – Great example of layered targets and disciplined trailing.
Chop Awareness – Recognizing chop and stepping back is as important as trading clean setups.
News Impact – Powell’s comments drastically altered market direction—important reminder to stay nimble and protect profits.
End-of-Day Surprise – Market-on-close imbalances can dramatically shift sentiment—never assume the day is done too early.
DTG Room Preview – Thursday, April 17, 2025
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Tariff Tensions Dominate: Markets remain focused on trade issues heading into the long Easter weekend. U.S. markets will be closed Friday for Good Friday.
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Powell’s Caution Weighs on Markets: Stocks dropped Wednesday after Fed Chair Powell warned tariffs could fuel inflation and hinder growth. He signaled a pause in monetary policy adjustments pending more clarity.
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Temu & Shein Price Hikes: Both e-commerce platforms will raise U.S. prices on April 25. The end of the $800 duty-free threshold on May 2 affects 4 million daily low-value shipments.
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Overnight Rebound: Futures recovered losses as U.S.-Japan trade talks sparked hopes for some tariff relief.
-
Tech & Trade Pressure:
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Nvidia (NVDA) CEO visited Beijing following new U.S. restrictions on H20 chip exports—previously the only AI chip allowed for sale to China.
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OVHCloud’s CEO says European nations are reassessing reliance on U.S. cloud giants due to trade tensions.
-
-
Earnings Watch:
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Premarket: AXP, BX, DHI, INFY, SCHW, STT, TFC, and others.
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After Hours: Netflix (NFLX), Independent Bank (INDB).
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Netflix is up 9% YTD and seen as well-positioned amid tariff uncertainty.
-
-
Economic Data (8:30am ET):
-
Unemployment Claims
-
Philly Fed Manufacturing Index
-
Building Permits
-
Housing Starts
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Fed Gov. Michael Barr speaks at 11:45am ET
-
-
Market Technicals:
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ES remains in a short-term uptrend within an intermediate-term downtrend.
-
Key resistance: 5459–5469; further resistance: 5699–5707.
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Support: 4923–4913.
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5-day average ES range down to 190 points; volatility high but declining.
-
No significant overnight whale activity.
-
ES -Week to Week
The bull/bear line for the ES is at 5315.00. This is the critical pivot for determining intraday bias. Holding below this level suggests continued bearish momentum, while reclaiming and holding above could shift the tone to bullish.
ES is currently trading around 5332.75, just above the bull/bear line, indicating a potential attempt by bulls to regain control. For sustained upside, the bulls must hold above 5315.00 and push toward resistance at 5411.00, the upper intraday range target. Higher targets are at 5425 and 5501.25.
If the market fails to hold above 5315.00, expect sellers to step in, targeting initial support at 5299.50. A break below this opens the door to test deeper support levels, first at 5251.00 and then the lower intraday range target at 5218.75. If downside pressure accelerates, the next meaningful support sits at 5128.50.
Overall, the short-term outlook hinges on whether the market can sustain above the bull/bear line at 5315.00. Caution is advised near this level, as it may act as a battleground for control of the day’s direction.
NQ – Week to Week
The bull/bear line for the NQ is at 18,417.00. This level marks the dividing line between bullish and bearish sentiment for today. Price is currently trading at 18,539.00 in the Globex session, placing it above the bull/bear line and indicating early bullish momentum.
If this bullish bias holds, the first resistance to monitor is 18,612.00, followed by 18,790.00. A breakout above these levels opens the door to test the upper range target at 18,826.00. Beyond that, 19,248.80 serves as a stretch target and possible exhaustion point for the session.
If price fails to hold above 18,417.00, downside pressure could resume. Initial support comes in at 18,369.30, followed by 18,116.30. A breakdown through these levels shifts focus toward the lower range target of 18,008.00. Continued weakness could eventually push price toward the 17,975.00 and 17,623.30 support zones.
In summary, above 18,417.00, bulls remain in control with eyes on 18,612.00, 18,790.00, and 18,826.00. Below that line, bears may regain momentum toward 18,116.30 and 18,008.00. Maintain a flexible bias and respect price action around the bull/bear pivot.
Calendars
Economic Calendar Today
This Week’s High Importance
Earnings:
Released
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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!
This post goes out as an email to our subscribers every day and is posted for free here around 2 PM ET. To get your real-time copy, sign up for the free or premium version here: Opening Print Subscribe.
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