on March 3, 2025

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Mutual Funds Mark Up Stocks as ES & NQ Rally into Month-End

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Our View

I had to start this Friday night while things were still fresh in my mind. With the exception of the Trump-Zelensky blow-up, the ES and NQ popped and dropped but they both recovered. Sure, the headlines whacked the ES and NQ down, but there was another force at work—the mutual funds and ETF buyers were active all day.

I’m not going to say it was easy to see, but every time the ES sold off, the bids came flying back in. I thought there might be an end-of-the-month walk-away, but you could see that the boys with the better seats were hard at work marking stocks up right from the get-go.

Here’s a post I put up at 10:46 AM on Twitter:

#ES $SPY $SPX #Tech $NVDA Marking some tech stocks up at month-end.
10:46 AM · Feb 28, 2025
1,054 Views

And another at 11:00 AM:

$ES $SPY $SPX #Tech #NVDA Because of the poor performance, the mutual funds/ETFs are marking stocks up.
11:00 AM · Feb 28, 2025
990 Views

There was weakness in the last two weeks of February, and everyone got too bearish, even me. But as I said, I noticed how both the ES and NQ would go bid right after the drops, and I also saw that volume was much higher than on several of the down days.

After trading down to 116.40, NVDA popped up to 121.62 going into 10:30 AM, and several other tech names did the same. It just wasn’t the same price action. You know how I always talk about the three parts of the trading session: what happens on Globex, what happens after the 9:30 AM open, and what happens in the last hour? Well, on Friday, that could not have been more true.

What happened wasn’t on anyone’s charts. What happened is the mutual funds were buying all day, and there was $7.2 billion to buy. After 3:00 PM, the ES made a low at 5900.25 and then rallied up to 5971.00, a 71.25 rally in about 35. This didn’t come out of thin air, it was part of the mutual funds’ month-end plan.

NVDA closed up 4% after selling off 8.5% on Thursday, MSTR closed up 6.4%, AAPL closed up 4.10%, AMZN closed up 1.54%, MSFT closed up 9.96%, and TSLA closed up 3.94%. That was a hell of a markup!

Our Lean

Bitcoin, which traded down to 78,000 on Friday, opened up 10,000 points on Sunday night. If you bought one CME contract at Friday’s close, you’d be up $50,000.

This week, we have 15 economic reports, including the February jobs report on Friday, along with nine Fed speakers, four of whom are speaking on Friday. I don’t think Friday’s late-day rip means all is well.

First Trading Day of March S&P 17 of the Last 25 Occasions

According to the Stock Trader’s Almanac, the first trading days of months have a bullish reputation, and March is no exception. Reviewing the last 25 years of data, the S&P 500 has the best record, advancing 68.0% of the time with an average gain of 0.36%. The NASDAQ is second best, with an impressive 0.65% average gain. Both the NASDAQ and DJIA were up 64.0% of the time during the period, with the DJIA showing a more modest average gain of 0.27%.

March’s first trading day strength hasn’t been limited to just the last 25 years. Since 1950, the DJIA has advanced 51 times in 75 years (68.0%) with an average gain of 0.23%. The S&P 500 was nearly as consistent, up 64.0% of the time with an average gain of 0.25%. The NASDAQ, since its inception in 1971, has been up 34 times in 54 years (63.0%) with a respectable 0.37% average gain.

Our lean: I can’t rule out another pop, but after a 123-point rally from the lows of the day, MrTopStep has a rule: after a big up day, the ES trades sideways to down. If the ES gaps higher, I’m selling the open.

I’m not saying we can’t go up, but I also can’t say not to sell a rip either. If the ES trades down to the 5910-5920 area, I think you can try some longs. But if this train keeps going up today, it’s going to be without me.

Beware the Trump headlines—they are coming today or tomorrow.

MiM and Daily Recap

The S&P 500 E-mini futures (ES) saw a choppy session on Friday, featuring a mix of rallies and sharp pullbacks before closing near session highs. The market initially saw early downside pressure, printing a low of 5857.00 at 9:33 AM after a weak open. However, buyers stepped in aggressively, fueling a steady rally that peaked at 5914.25 by 11:00 AM. This represented a gain of 57.25 points (+0.98%) from the morning low.

Following this high, the ES experienced a measured pullback, falling to 5881.75 by 11:30 AM (-32.50 points, -0.55%), only to recover and attempt another rally towards 5907.50 at 11:48 AM. This failed to hold, and a further decline took it down to 5888.75 by 12:03 PM.

The early afternoon session saw another push higher, but the market lacked momentum, with another lower high forming at 5907.00 at 12:18 PM before sellers regained control. A more aggressive selloff took the ES to the day’s low of 5848.00 at 1:21 PM (-59.00 points, -1.00%), the steepest decline of the day.

However, that low triggered strong buying into the late afternoon. The ES launched into a relentless rally, gaining over 100 points off the 1:21 PM low to reach session highs of 5971.00 and settling at the cash close at 5964. This marked a full recovery from earlier losses and left the ES closing near the highs, ending the regular session up 84.25 points (+1.43%) from its cash open and up 86.50 points (+1.47%) from the previous cash close.

Despite the sharp intraday declines, the afternoon rally confirmed strong dip-buying activity, with a shift towards bullish momentum into the weekend. The strong finish left the ES up 86.50 points (+1.47%) from the prior close, signaling that buyers remain in control despite the volatility.

The Market-On-Close (MOC) imbalance report showed a significant $7.45 billion in buy-side interest, with just shy of 60% of symbols favoring buys, suggesting broad market strength but not an overwhelming bias. This buy-heavy close supported the late-session surge and reinforced bullish sentiment heading into Monday’s session.

Friday’s session highlighted resilience in the market, with buyers stepping in aggressively on each pullback. The strong afternoon rally into the close suggests continuation strength, though volatility remains elevated. Heading into the new week, traders will be watching to see if momentum can sustain above 5964.00 or if another round of selling emerges on profit-taking.

How to read the MIM

Technical Edge

Fair Values for March 3, 2025:

SP: 9.78
NQ: 36.75
Dow: 66.11

Daily Breadth Data 📊

NYSE Breadth: 72% Upside Volume
Nasdaq Breadth: 68% Upside Volume
Total Breadth: 70% Upside Volume
NYSE Advance/Decline: 69% Advance
Nasdaq Advance/Decline: 61% Advance
Total Advance/Decline: 65% Advance
NYSE New Highs/New Lows: 61 / 143
Nasdaq New Highs/New Lows: 71 / 410
NYSE TRIN: 1.01
Nasdaq TRIN: 0.73

Weekly Breadth Data 📈

NYSE Breadth: 50% Upside Volume
Nasdaq Breadth: 45% Upside Volume
Total Breadth: 47% Upside Volume
NYSE Advance/Decline: 52% Advance
Nasdaq Advance/Decline: 35% Advance
Total Advance/Decline: 43% Advance
NYSE New Highs/New Lows: 119 / 232
Nasdaq New Highs/New Lows: 213 / 680
NYSE TRIN: 1.00
Nasdaq TRIN: 0.85

Room Summaries:

Polaris Trading Group Summary Friday, February 28, 2024

Market Overview & Key Levels

Line in the Sand: 5875
Bearish Target: 5855 – 5850
Bullish Target: 5900 – 5910
VWAP Held: Critical for bullish continuation

Morning Session

David announced he’d be mostly offline due to his wife’s injury but kept charts online.
Economic data was mixed: Inflation in line, income up, spending down, and inventories growing.
Initial Market Action:
- Expected MATD rhythms early.
- Market saw early liquidation and margin call flush below 5875.
- Bulls needed to C&C 5890 to establish strength.
5890 rejection: Confirmed resistance, but a later retest showed potential.

Midday Action

Clearing 5890 was key, and bulls managed to push towards 5900 before rejection.
VWAP support crucial: Market started a long-side grind with conversion.
5910 C&C needed: If bulls could hold above, further upside potential.

Afternoon & Close

Bearish Target Zone (5855-5850) was hit with ultra-precision.
Market showed strong responsiveness to key levels, reinforcing the importance of structured setups.
David left early to take his wife to the doctor, and charts went offline.

Key Lessons & Takeaways

Precision in Execution: Both bull and bear scenarios played out exactly to targets.
C&C Concept in Action: 5890 needed clearing for bullish strength, reinforcing the importance of this level.
End-of-Month Volatility: As expected, some “shenanigans” played out.
Always Have Stops: A critical reminder given the liquidation moves.

DTG Room Preview – Monday, March 3, 2025

Morning Market Brief
- Tariff Uncertainty: Commerce Secretary Howard Lutnick described tariffs on Mexico and Canada as a “fluid situation,” while Treasury Secretary Scott Bessent noted Mexico proposed mirroring U.S. tariffs on China. Canada may follow suit.
- GDP Concerns: The Atlanta Fed’s GDPNow model forecasts a 1.5% Q1 contraction, the first since the COVID era. Imports are surging ahead of potential tariffs, impacting GDP, while consumer spending and exports weakened in January. Capital Economics projects a 1% Q1 GDP decline, raising “Trumpcession” concerns.
- Crypto Surge: Bitcoin, Ethereum, XRP, Solana, and Cardano spiked following Trump’s announcement of a U.S. strategic cryptocurrency reserve.
- Earnings This Week: Key reports include Target (TGT), Macy’s (M), Abercrombie & Fitch (ANF), Costco (COST), Broadcom (AVGO), Marvell (MRVL), Okta (OKTA), and Zscaler (ZS). Today, only OKTA reports after the bell.
- Economic Data Focus: Friday’s February Jobs Report is the week’s highlight. Today’s data includes S&P Global Manufacturing Index (9:45 AM ET) and ISM Manufacturing PMI & Prices + Construction Spending (10:00 AM ET).
- Market Volatility & Technicals:
  - The ES 5-day average daily range is around 101 points—volatility remains high.
  - No significant whale trading bias overnight.
  - Key ES levels:
    - Support (TL Ss): 5958/61, 5680/75, 5639/34
    - Resistance (TL Rs): 5947/50, 6164/67, 6385/90
  - ES bounced off its 200-day MA (5845.75) Friday but remains in a short-term downtrend, with the 50-day MA (6027.75) as key resistance.

ES Week vs. Week

The long-term trend bull/bear line for today is set at 6150.50, marking the crucial level where the market transitions between bullish and bearish sentiment. Holding above this level would give buyers an opportunity to regain control, while failure to hold it may lead to further weakness.

The intraday bull/bear line sits at 5941.75; trades above this level favor more buying, while trading below it favors downside movement for the day. Currently, the market is trading around 5986, above the 5941.75 level, which keeps the bias tilted towards the upside unless we see a strong move back below it.

On the upside, initial resistance is at 6015.75, which is our range high target for the day, followed by 6054. If buyers can reclaim these levels, a push toward 6150.50 becomes more probable, with the next major resistance at 6212.

On the downside, support is found at 5895.75 and 5883. Our range low target for the day is 5897.50.

For today’s session, watch for any tests of the intraday bull/bear line at 5941.75—holding above it could lead to bullish continuation, while rejection and continued trade below this level could invite further downside pressure.

NQ Week vs. Week

The long-term bull/bear line for NQ is at 21,952, making it the key level that needs to be traded above to shift the long-term market into bullish sentiment.

Our intraday bull/bear line sits at 20,832. Overnight action has shown some recovery, but price remains vulnerable. Bulls need to hold above this level to keep upward momentum in play. The first upside target is 21,027, with stronger resistance at 21,178. If buyers sustain momentum beyond this level, look for a push toward 21,527, our target range high for the day, with a stretch goal near 21,666.

If price falls below 20,832, expect renewed selling pressure. Immediate support is at 20,690, followed by our range low target level at 20,474. A failure to defend this area could drive prices lower toward 20,138, where stronger buyers may emerge.

Watch price action closely at the open to see if buyers can establish control above 20,832 or if sellers regain dominance and push toward lower support levels.