Markets Don’t Like Maybes

on April 2, 2025

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Our View

This is not an easy game. The ES sold off hard Sunday night into Monday’s open, made an early low, then rallied 139 points and opened lower Tuesday, rallied again, and then failed. Like I said in the MTS chat, the ES and NQ have the ‘Trump tariff blues,’ and even though he is scheduled to talk today at 4:00pm in the Rose Garden, I doubt we’ve heard the last of his tariff shenanigans.

The ES made a 5663.50 high on Globex and a 5650 high during the day session. After the open it sold off down to 5600.25 at 10:20 and rallied 94.5 points up to 5694.75 at 12.20. It seems like 100 or 100+ point ranges are now an everyday occurrence.

Like at the end of February and March, when there were all those forecasts of ES 5900.00. Maybe after Trump does his April 2nd 4:00 PM ET speech, the markets will breathe a bit, but what the bulls continue to learn is you can’t buy strength. And to back that up, the ES sold off 69 points down to the 5629 area at 2:40 and then traded 5670 at the 3:50 imbalance, which showed 1.1 billion to buy.

Trump’s Liberation Day (today) is set to announce ‘sweeping tariffs,’ and the EU says it’s ready to respond. Trump is scheduled to speak at 4:00 ET from the White House Rose Garden, and investors are bracing for the headlines. I think the administration should have been more methodical in its approach toward the endless tariffs and deadlines, but Trump thinks he’s the master of deal-making. So far, every tariff has been responded to with counter-tariffs against the U.S. What it’s done is turn friendly partners into pissed-off partners at a time when the world is dealing with high inflation and pushing the U.S. into a recession. Not something Trump’s voter base was counting on, and it’s helped destabilize the U.S. stock market in the process.

And to be honest, I doubt this will be the last of the tariffs. The S&P and NASDAQ have had a difficult quarter, with both notching their worst quarters since 2022. It’s pushed investors overseas and led some top analysts to trim their forecasts for economic growth.

Our Lean

The ES is trying to claw its way back after falling 10% from its February record. This is a far cry from 2023 and 2024, when the ES gained 54% over the two years and the Fed tried to push inflation down with three interest rate cuts at the end of 2024. The question is: has the S&P’s dominance given way to an age of European dominance? I think the jury is out on that question, but the longer the administration continues on its path of cutting government jobs and threatening our partners with tariffs, the outflows from the U.S. stock market to Europe will continue. So far, the STOXX 600 has outperformed the S&P by almost 10%—its largest quarter since 2015.

Our lean: There is a ton of talk about the ES trading up to its 200-day moving average at 5900.00. Will the ES sell off after Trump’s 3:00 press conference and then stage some type of relief rally? Or will the headlines just push the ES back down like all the big dead cat bounces?

Go slow, trade less and pick your spots better today.

Bank of America’s March global fund manager survey showed a record rotation out of U.S. stocks, leaving a net 23% of respondents underweight shares of American companies. Preference for eurozone equities, meanwhile, leapt to its highest level since July 2021. Not exactly a ringing endorsement for the U.S. stock market.

My guess is the ES sees another day of big rips and dips, but if Trump starts talking about delaying the tariffs, the ES and NQ will rally sharply. I can’t rule out buying weakness, but I also can’t say I won’t be looking to sell the Trump headlines if he presses forward with all his threats.

From Stock Traders Almanac

Down Q1 Can Lead to More Trouble

This is no April Fool’s joke. Adding to our concerns that the market in 2025 continues to track less bullish post-election year scenarios is the history of market performance following down first quarters, especially in post-election years. First the good news. April has been up on average about 63% of the time. Q4 has been even stronger. Though both April and Q4 have taken some hits as well.

But unfortunately, Q2 and Q3 have been weak overall and Q3 especially in post-election years. Most compelling is that if the market had already achieved bear market levels when Q1 was down it was usually near a bottom or low point from which the market rallied substantially. Conversely, if Q1 is negative and the market has not reached bear market status or is not far from a recent all-time high, then we have more often than not experienced further market trouble and downside action over the subsequent nine months.

Several of the weak republican post-election years discussed on page 28 of the 2025 Almanac also standout: 1953, 1957, 1969, 1973, 1981 as well as 1977, Jimmy Carter’s difficult first year. There are several other non-post-election years of concern, most recently 2022. The most impressive turnarounds from down Q1s occurred at or near the ends of bear markets in 1980, 1982, 2003, 2009 and 2020 after Covid-19 induced the shortest bear market on record.

MiM and Daily Recap

The S&P 500 futures (ES) opened the new quarter with a choppy yet ultimately constructive session, marked by sharp reversals and strong afternoon buying interest. Action began in the overnight Globex session with ES printing a low of 5618.00 before drifting higher into the regular trading open at 5638.75, down 5.50 points from the prior Globex close.

In the cash session, early volatility took hold as ES briefly popped to 5650.00 at 9:45 AM but quickly reversed down to the session low of 5600.25 at 10:20 AM. This 49.75-point decline from the morning high reflected a sharp -0.88% drop. Buyers stepped in aggressively afterwards, launching a powerful rally that carried the index to the session’s peak of 5694.75 by 12:20 PM, a 94.50-point climb from the low (+1.69%).

A steady fade followed the midday high, dragging ES down to 5625.75 at 2:50 PM, trimming 69.00 points from the high (-1.21%). But the selling lacked follow-through. A late-day ramp took over, pushing ES to settle at 5674.75, up 36.00 points from the regular session open and 18.50 points (+0.33%) from the prior day’s cash close.

During the cleanup session (4:00–5:00 PM), prices drifted modestly lower to finish at 5672.25, trimming just 2.50 points from the regular close. Total volume was robust, with 1,454,605 contracts exchanged during the cash session and 1.81 million for the full day.

The tone leaned bullish despite early whipsaws. After the initial selloff to 5600.25, buyers held control for most of the session, managing a significant midday advance. While some weakness emerged into the afternoon, it lacked heavy volume conviction, and dip buyers emerged again to close near the highs.

Market-on-Close (MOC) imbalance data revealed a strong tilt to the buy side. At 3:56 PM, total imbalance reached $1.374B. Symbol imbalance stood at 60.7%, just below the 66% threshold for a notable buy imbalance. While not extreme, the sustained skew toward buy-side activity helped underpin the late-day strength and support the final push into settlement.

In summary, the session was marked by a powerful reversal off morning lows and a resilient close near highs. With strong midday breadth and buy-side imbalances into the close, the bulls retained short-term momentum heading into the next session.

How to read the MIM

Technical Edge

MrTopStep Levels:

How to read MTS Levels

Fair Values for April 2, 2025:

SP: 44.36
NQ: 175
Dow: 282.17

Daily Market Recap 📊

Tuesday, April 1, 2025
- NYSE Breadth: 58% Upside Volume
- Nasdaq Breadth: 59% Upside Volume
- Total Breadth: 59% Upside Volume
- NYSE Advance/Decline: 63% Advance
- Nasdaq Advance/Decline: 52% Advance
- Total Advance/Decline: 57% Advance
- NYSE New Highs/New Lows: 34 / 144
- Nasdaq New Highs/New Lows: 48 / 446
- NYSE TRIN: 1.22
- Nasdaq TRIN: 0.75

Weekly Market 📈

Week Ending Friday, March 28, 2025
- NYSE Breadth: 42% Upside Volume
- Nasdaq Breadth: 51% Upside Volume
- Total Breadth: 48% Upside Volume
- NYSE Advance/Decline: 35% Advance
- Nasdaq Advance/Decline: 29% Advance
- Total Advance/Decline: 30% Advance
- NYSE New Highs/New Lows: 112 / 204
- Nasdaq New Highs/New Lows: 187 / 610
- NYSE TRIN: 1.33
- Nasdaq TRIN: 0.82

Guest Posts — Polaris Trading Group

Prior Session was Cycle Day 2: Textbook CD2 as price oscillated within the upper and lower expected range parameters (5613 – 5682) forming “balanced consolidation” rhythms. Range for this session was 94 handles on 1.810M 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 4.1.25

…Transition from Cycle Day 2 to Cycle Day 3

Transition into Cycle Day 3: Cycle objective (5634) has been satisfied. As such we’ll mark this day as a “wild-card” for direction.

Today is the infamous “liberation-day” as expected tariffs are slated to go into effect. This has been a highly broadcasted event, with the markets positioning for the worse-case scenarios.

Trump has repeatedly called April 2 “Liberation Day,” with promises to roll out a set of tariffs, or taxes on imports from other countries, that he says will free the U.S. from a reliance on foreign goods. To do this, Trump has said he’ll impose “reciprocal” tariffs to match the duties that other countries charge on U.S. products.

But a lot remains unknown about how these levies will actually be implemented. White House press secretary Karoline Leavitt said Monday that Trump would unveil his plans to place reciprocal tariffs on nearly all American trading partners on Wednesday, but maintained that the details are up to the president to announce.

Source: heraldledger.com

The BIG WILD-CARD is President Trump himself, as at any moment he could adjust / modify the terms of any and all of the expected tariffs. Be on alert for the dreaded Trump Tweet Bomb (TTB).

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 5675+-, initially targets 5700 – 5720 zone.

Bear Scenario: Price sustains an offer below 5675+-, initially targets 5650 – 5630 zone.

PVA High Edge = 5682 PVA Low Edge = 5636 Prior POC = 5675

ESM

Thanks for reading, PTGDavid

Trading Room Summaries

Polaris Trading Group Summary – Tuesday, April 1, 2025

Tuesday’s session in the PTG trading room showcased excellent structure, disciplined execution, and clear trend development, particularly in the late morning. Both CL and ES offered profitable opportunities for traders who followed the methodology and managed risk carefully.

Morning Prep & Market Context

David opened the day with the usual resources and guidance. The market was transitioning into Cycle Day 2 after fulfilling the 3-Day Cycle Objective on Monday. This setup called for some consolidation as traders digested end-of-quarter activity and looked ahead to April 2nd’s “Tariff Liberation Day.”

Price action was initially quiet, holding within the defined bull/bear scenario levels centered around 5645. The guidance was clear: stay aligned with the dominant force, take only high-quality setups, and always have hard stop-losses in place.

Opening Action & Early Trade Wins

Crude Oil (CL) triggered a long off the open range, hitting all defined targets (TGT1, TGT2, and final targets). This was a clean, textbook trade.
ES offered a 3410 short setup, which also reached all targets. The trade was supported with an instructional video for added context.
David noted that early rhythm would follow a Morning After Trend Day (MATD) structure, and the market behaved accordingly.

Midday Trend Emerges

As the morning progressed, price broke through the upper end of the Initial Balance (5650), triggering a trend move higher. A V-Bottom reversal pattern helped confirm the long bias, and the A4 long trade played out favorably.

Trailing stop management was emphasized, with ATR-based tools used to manage risk as the trade extended. The symmetrical move projected a target of 5740, and price action pushed toward that level. David pointed out the improved rhythm and structure compared to the previous day.

Afternoon Volatility and Close

Following lunch, bulls gave up some of their gains, with David humorously noting they “slipped on the soap bar.” Price pulled back into the open range, and the reaction there became a key marker. Bulls successfully defended the open range, preventing a breakdown and regaining control into the close.

The session ended strong with a $1.1 billion MOC (Market on Close) buy imbalance that helped drive a late-session rally. Bulls were in control into the final minutes of trading, confirming the trend dynamics discussed earlier.

Key Lessons and Takeaways

Stay patient and disciplined; focus on Triple A setups only.
Step aside during high-volatility events like ISM to protect capital.
Use structural tools like Open Range, VWAP, and Initial Balance to define risk and opportunity.
Recognizing reversal setups such as the V-Bottom can lead to high-quality trend trades.
Effective trailing stop strategy, particularly using ATR, is critical in capturing extended moves.

Trader Feedback and Community Notes

Bueller expressed appreciation for David’s guidance on trailing stop management. Kim from Canada left a 5-star review highlighting how the PTG strategy and trade recaps help her stay aligned with key levels and directional bias. The room was engaged and positive, with traders offering insights and camaraderie throughout the session.

Summary:
Tuesday was a strong, structured trading day with profitable setups in both crude oil and equity futures. The market rewarded those who stayed in alignment with the dominant force and used defined levels to frame trades. Emphasis on trade management and pattern recognition made this a valuable session for both execution and learning.

Discovery Trading Group Room Preview – Wednesday, April 2, 2025

Q1 Market Wrap:
- S&P 500 closed Q1 down 4.5%, marking the worst quarter since 2022
- Nasdaq lost over 10%
- Notable YTD performers: NVDA down nearly 20%, TSLA down over 35%
Commodities:
- Oil jumped more than 3%, settling above $75 after Trump threatened sanctions on countries buying Russian oil
- Gold continues to hit new all-time highs
Tariff Watch:
- Trump’s auto tariffs go into effect today, prompting a rush of car buyers
  - A 25% tariff would raise the average cost of foreign-built vehicles by $10K
  - Average auto payments could increase by around $300/month
- Most traders view these threats as negotiation tactics, but the market impact is real
Semiconductor Push:
- Commerce Secretary Lutnick may withhold Chips Act grants to pressure further US semiconductor investment
- TSM raised its US plant investment to $165B, up from a prior $65B commitment
EV Sector:
- Lucid is beginning to see signs of recovery
IPO Action:
- NewsMax IPO surged 735%, closing its first day at $83.51 after launching at $10
Economic Calendar:
- No major earnings today
- Key events:
  - 9:00am ET – Fed’s Barkin speaks
  - 9:45am ET – S&P Global Manufacturing PMI
  - 10:00am ET – ISM Manufacturing PMI, ISM Prices, JOLTs, and Construction Spending
Volatility & Flow:
- Volatility rose for the second straight session
- ES 5-day average daily range is now 94.5 points
- Whale bias is leaning bullish into the US open on borderline significant volume
ES Technical Levels:
- Monday formed a potential swing low; more confirmation needed
- Bulls need to clear the former support trendline now acting as resistance at 5668/63s
- Potential resistance levels: 5668/63s, 5779/74s, 5893/98s, 6212/07s
- Potential support levels: 5532/29s, 5461/56s, 5339/34s

ES -Week to Week

The bull/bear line for the ES is at 5663.75. This is the critical pivot level for today’s session. Price currently trades below this mark at 5642.00, signaling bearish sentiment heading into the open.

If ES remains below 5663.75, we look for continued downside movement toward the first target of 5599. The next lower level is our lower range target at 5589.00. A break below this level could accelerate selling toward deeper support near 5519.00.

On the upside, if ES can reclaim 5663.75 and hold above, the first key resistance level is 5674.50. Clearing this area would open the door to test 5694.75 and the upper range target at 5738.25. Sustained strength above that level may bring 5770.50 and 5808.50 into play.

In summary, ES remains in a bearish posture below 5663.75. Watch for potential rebounds toward the bull/bear line, but sellers control the tape while price stays under this key level.

NQ – Week to Week

The bull/bear line for the NQ is at 19,543.75. This is the critical pivot level for today. As long as price holds below this level, the market remains vulnerable to downside continuation.

Currently, NQ is trading around 19,474.75, well below the bull/bear line. This confirms a bearish tone heading into the regular session. The first floor down is the previous open at 19422.25. The lower intraday range target is 19,235.75. If price pushes through this level, watch for extended weakness toward the next support at 18,945.75.

On the upside, resistance starts at 19,592.50, which is the top of the lower balance zone from the prior session. If bulls reclaim the bull/bear line and hold above 19,543.75 watch for a strike at the previous high at 19,655 and then a squeeze toward the upper intraday target of 19,851.75 is possible. Beyond that, further resistance lies at 20,141.75 and 20,198.75.

In summary, the market bias is bearish below 19,543.75, with lower targets in play. A move back above this key level would neutralize the downside and open up the path toward the upper range levels.