on March 19, 2025

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FOMC Decision Looms: Powell Unlikely to Change the Market’s Course

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Our View

The rollover has slowed the markets, with the ES’s range shrinking to just 36.25 points. The ES opened at 5708.75, then sold off down to 5650, bounced, and sold off again to a lower high. After that, the results of the 20-year auction were released, and both the ES and NQ popped briefly and then sold off again to another higher low. The market then rallied, making several highs at the 5673 level.

That’s when I posted in the room:

IMPRO : Dboy (2:49:12 PM): All these highs at 73-74 gotta pop the stops.
IMPRO : Dboy (2:51:31 PM): ES and NQ made several higher lows, and within seconds, the ES ran the stops above their respective highs, trading up to 5685, while the NQ popped up to 219,780.
IMPRO : Dboy (2:52:09 PM): You could see this pop coming. This is the type of stuff I do and always have done.

The ES seemed to want to hold better than the NQ (NVDA was down $3.00 to $4.00 all day). Both indexes upticked but there really wasn’t anything to hang your hat on as both went down on the day. Plain and simple, the two-day rally came to a screeching halt.

Despite everything, President Trump’s approval ratings are higher than ever. Last week, Republicans avoided a government shutdown, as did the Putin-Trump phone call, but Trump left out one of Putin’s key conditions: “to prevent an escalation in its war in Ukraine would be the suspension of foreign military aid and intelligence to the Ukrainian government.”

The phone call meeting with Putin seemed to go well, and tariff-related chatter has been on the down-low this week. That said, Tesla (TSLA) and Nvidia (NVDA) both sold off, with the NVDA CEO addressing the chip maker’s AI conference. Additionally, the communication services and information technology sectors were the worst performers on Tuesday, making it difficult for the rest of the markets to rally.

The tech-heavy Nasdaq Composite led the decline, falling 1.7%, while the ES was down 1.1%, and the YM dropped 0.6%, definitely a horse of a different color. Meanwhile, a new survey of fund managers showed a record rotation away from U.S. stocks, reflecting growing concerns about global growth.

Here is a link to the WSJ growth story:
Investors Ditch U.S. Stocks, Worry About Global Growth.

I know I’ve said before that I’m not here to fight city hall and if the ES is going up, I want to go for the ride. But I left something out – if the ES is going up or down, I want to go for the ride.

I’ll keep this short. I never really got overly bullish because I believe there are just too many negatives facing the stock market. One is really simple: the market has surged over 50% in two years. Another issue is the concentration of 7 to 10 stocks making up 32% to 34% of the total market cap, which was already a concern in 2023 but has become an even bigger issue in 2024. And last but not least, the biggest drop in allocation to U.S. equities on record. A net 23% of respondents said they were underweight American stocks.

Our Lean

There are no economic releases today, but we do have the FOMC rate decision at 2:00 PM, followed by Powell’s press conference at 2:30 PM. I’m really down on the Fed—I think they have contributed to the sell-off, and like many, I’ve lost faith in them. There was talk about a July rate cut, and I say hogwash to that. I really don’t think there will be, nor should there be, any rate cuts in 2025.

Our lean: I don’t think there’s anything Powell can say that will change the scenery. The PitBull said Trump wants a recession to lower rates, but there’s a lot of risk tied to something like that. The market’s two-day reprieve from selling is over, and now it’s back to reality. As for yesterday’s lean, I did buy the open, but it didn’t take long to figure out that the NQ was in trouble. Our lean is to sell the rips. After a beatdown, we could see a good pop, but I think we’re back to looking at ES 5500.00 and lower. ES needs to get under 5650 today.

▼ CTA update for Equities: now buyers of S&P in all short-term scenarios latest flow estimates: over 1-week: .. flat tape: +$4.6bn to BUY (+$2.3bn SPX to BUY) .. up big: +$4.9bn to BUY (+$3bn SPX to BUY) .. down big: -$14bn to SELL (+$1.7bn SPX to BUY) over 1-month: .. flat tape: +$22.6bn to BUY (+$3.9bn SPX to BUY) .. up big: +$114bn to BUY (+$58bn SPX to BUY) .. down big: -$76bn to SELL (-$0.7bn SPX to BUY)

MiM and Daily Recap

The S&P 500 futures (ES) experienced a volatile session, characterized by early weakness, a mid-morning selloff, and choppy afternoon price action. The session opened at 5708.75 in the regular trading hours, following an overnight Globex close of 5709.00, which was already down from the prior day’s settlement of 5731.50. Initial attempts to push higher met resistance at 5711.25 at 9:30 AM, marking an early session high before a decisive drop began.

By 9:30 AM, the ES had fallen to 5701.25, marking a decline of 21.50 points (-0.38%) from the morning high. Selling pressure intensified, and a morning low was reached at 10:18 AM at 5661.75, reflecting a steep 49.50-point drop (-0.87%). However, buyers stepped in, leading to a rebound that peaked at 10:42 AM at 5681.25, a recovery of 19.50 points (+1.34%).

Midday trading saw further fluctuations. ES pulled back to 5653.25 at 11:06 AM before climbing again to 5678.75 at 12:30 PM, marking the session’s high during lunchtime trading. The 28.00-point gain (+0.50%) from the earlier dip was met with resistance, leading to another wave of declines, hitting 5652.00 at 1:18 PM (-0.36%).

The afternoon session saw choppy but slightly bullish action. A move to 5682.50 at 2:51 PM (+0.45%) was the highest print of the afternoon before a late-session pullback took ES down to 5669.50 at 3:27 PM (-1.16%). A mild bounce ensued, closing the regular session at 5672.00, down 36.75 points (-0.64%) from the open and down 60.75 points (-1.06%) from the prior cash close.

The Market-on-Close (MOC) imbalance data revealed a net imbalance of $442 million, with buy-side imbalances outweighing sell-side orders. The symbol percentage at 51.8% suggested a slight skew toward buying activity, though not enough to spark a significant end-of-day rally. The imbalance was not extreme, failing to breach the ±66% threshold for a notable directional push.

Overall, the market displayed a bearish tone throughout the session, struggling to sustain rebounds as sellers remained dominant. The ES closed down -1.08% for the full session, reflecting persistent weakness. Heading into the next session, traders will be watching for potential follow-through on the downside or signs of stabilization near the current support levels.

Trading volume was normal with 1.2M shares trading over the full day and just shy of 1M on the cash session.

How to read the MIM

Technical Edge

MrTopStep Levels:

How to read MTS Levels

Fair Values for March 19, 2025:

SP: 52.88
NQ: 208.94
Dow: 354.63

Daily Market Recap 📊

NYSE Breadth: 41% Upside Volume
Nasdaq Breadth: 36% Upside Volume
Total Breadth: 37% Upside Volume
NYSE Advance/Decline: 36% Advance
Nasdaq Advance/Decline: 34% Advance
Total Advance/Decline: 35% Advance
NYSE New Highs/New Lows: 47 / 37
Nasdaq New Highs/New Lows: 62 / 158
NYSE TRIN: 0.76
Nasdaq TRIN: 0.92

Weekly Market 📈

NYSE Breadth: 46% Upside Volume
Nasdaq Breadth: 51% Upside Volume
Total Breadth: 49% Upside Volume
NYSE Advance/Decline: 32% Advance
Nasdaq Advance/Decline: 32% Advance
Total Advance/Decline: 32% Advance
NYSE New Highs/New Lows: 85 / 345
Nasdaq New Highs/New Lows: 132 / 804
NYSE TRIN: 0.89
Nasdaq TRIN: 0.76

Guest Posts — Polaris Trading Group

Prior Session was Cycle Day 1: Textbook Cycle Day 1 as price declined to the CD1 Average Decline Projection (5667), establishing a new Cycle Low @ 5650.75. Range for this session was 87 handles on 1.182M contracts exchanged.

PTG Glossary

FREE TRIAL link to PTG/Taylor Three Day Cycle

Reframing Negative Beliefs into Empowering Ones

For a more detailed recap of the trading session, click on this link: Trading Room RECAP 3.18.25

…Transition from Cycle Day 1 to Cycle Day 2

Transition into Cycle Day 2: The Main Event for today is the FOMC Policy Statement and Presser.

FED Watch Tool has March probabilities at 100% no change in the current target rate between 4.25% – 4.50%

May: 82.4% – 4.25 – 4.50 17.6% – 4.00 – 4.25

June: 55.4% 4.00 – 4.25 34.3% 4.25 – 4.50 10.3% 3.75 – 4.00

Presser at 2:30 ET should provide traders with greater forward-looking clarity on potential policy changes and/or effects.

Of course, nothing changes for PTG…Simply follow your plan. Take only Triple A setups and manage the $risk. ALWAYS HAVE HARD STOP-LOSSES in-place on the exchange.

PTG’s Primary Directive (PD) is to ALWAYS STAY IN ALIGNMENT with the DOMINANT FORCE.

As such, scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 5670+-, initially targets 5685 – 5695 zone.

Bear Scenario: Price sustains an offer below 5670+-, initially targets 5655 – 5650 zone.

PVA High Edge = 5677 PVA Low Edge = 5658 Prior POC = 5671

ESM

Thanks for reading, PTGDavid

Trading Room Summaries

Polaris Trading Group Summary – Tuesday, March 18, 2025

Yesterday was a neutral, consolidation-heavy trading session ahead of Wednesday’s FOMC decision, with early action providing some solid trade opportunities before the market settled into a tight, choppy range in the afternoon.

Morning Session: Strong Early Trades

The day started with muted overnight action and a narrow range, with 5725 marked as the line in the sand.
The first short trade setups hit quickly:
- @ES & @NQ Open Range shorts both triggered and TGT1 was fulfilled early.
- @NQ Opening Range Short—all targets fulfilled.
- @ES Open Range Target 2 hit, with a trailing stop on the final tranche.
- @NQ and @ES Cycle Day 1 Average Decline levels fulfilled—a key technical level.

This early selling pressure confirmed a downside bias, but as the morning progressed, price started to balance between 5665-5680, signaling potential stabilization.

Midday: Crude Oil Trade Provides Opportunity

While equity markets slowed down, Crude Oil (@CL) Open Range Short trades paid off:
- TGT1, TGT2, and final lower target all hit.
- Stop trails were adjusted accordingly.
- Traders noted that there wasn’t much else to grab during lunch, as momentum faded.

Afternoon: Tight Range & Consolidation

Markets rotated around 5667, the projected Cycle Day 1 average decline.
Trading volume validated target zones, reinforcing price levels.
PTGDavid noted the lack of movement, humorously mentioning that he was sitting on his hands most of the day.

End of Day: FOMC Anticipation

MOC Buy Imbalance of $745M noted but considered minor (“mice nutz”).
The day ended neutral with the market essentially waiting for the FOMC announcement tomorrow.
FED Watch Tool showed a 98% probability of no change in the 4.25% – 4.50% target rate.

Key Takeaways & Lessons Learned

Strong execution in early short trades with clear target fulfillments.
Crude Oil provided solid trades while equities slowed down.
Market consolidation ahead of FOMC—sometimes, sitting on your hands is the best move.

Discovery Trading Group Room Preview – Wednesday, March 19, 2025

Key Events Today:
- Fed Day: The Federal Reserve will release its monetary policy decision at 2:00 PM ET, followed by a press conference with Fed Chair Jerome Powell.
- Dot Plot Update: The Fed’s dot plot, showing members’ rate cut expectations, will also be released. Previously, the consensus was for two cuts this year, but markets now anticipate three.
- Economic Data: Crude Oil Inventories report at 10:30 AM ET.
Market Recap & Developments:
- Tech-Led Selloff: Stocks dropped Tuesday, with the Nasdaq leading the decline (-2%) as Nvidia (NVDA) fell 3% following an underwhelming GTC event. The “Magnificent Seven” stocks are having their worst quarter in two years.
- Major M&A: Israel-based cybersecurity firm Wiz has been acquired for $32 billion in an all-cash deal.
- Job Cuts: Morgan Stanley (MS) is planning layoffs affecting 2%–3% of its workforce (~2,000 employees).
- Trade War Tensions: Potential April 2 tariffs from the Trump administration could escalate trade conflicts with U.S. partners.
- Tencent Earnings: The gaming and tech giant reported $23.83B in quarterly revenue.
- Corporate Earnings (Premarket): BioNTech (BNTX), General Mills (GIS), Prudential (PUK), Sportradar Group (SRAD), Williams-Sonoma (WSM).
Market Sentiment & Technicals:
- Volatility Cooling: The ES 5-day average daily range is 111 points, ticking lower for the second straight day.
- Whale Bias: Leaning bearish into the U.S. session amid light overnight large-trader volume.
- Technical Levels: Monday’s high-of-day (HOD) is now a key swing high, widening the ES short-term downtrend channel.

ES -Week to Week

The bull/bear line for ES is at 5679.25. This is the key level that must be reclaimed for bullish momentum to resume. If ES holds above this level, we can look for potential buying opportunities.

Currently, ES is trading at 5682.75, slightly above the bull/bear line, suggesting a neutral to slightly bullish stance. If buyers can maintain control, the next upside targets are 5738.25 and 5751.00, which is our range-high target. A break above these levels could extend the rally toward 5766.50 and 5818.50.

On the downside, if ES falls back below 5679.25, it may retest support at 5647.25. A break below this level opens the door for further declines toward 5607.50 our range low target on the day. If selling pressure intensifies, the next major support level is 5540.00.

NQ – Week to Week

The bull/bear line for NQ is at 19,755.25. This is the key level that must be reclaimed for bullish momentum to take hold. Above this level, we could see buyers step in.

Currently, NQ is trading around 19,762.00, slightly above the bull/bear line. If it holds above this level, the next resistance to watch is 20,2041 and then our range high target at 20,069.25. Next higher is 20,364.75.

On the downside, if NQ drops below 19,755.25, expect selling pressure toward 19,604.25. A break below this level could extend losses to 19,441.25, our lower-range target. Deeper support comes in at 19,145.75.