PPT Watch: How Far Must the Market Fall Before the Rescue?

on April 22, 2025

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Our View

The tone of the ES and NQ was set in stone late Thursday when President Trump suggested China pay a U.S. port tax of $1.5 million per shipment. But it doesn’t end there. Monday’s headlines included Trump criticizing Fed Chair Powell and dueling headlines that both the EU and Japan said they made no progress in U.S. trade talks. Maybe it’s all part of the art of the deal, but the lack of progress on trade talks has pushed bond yields up, hit the dollar (Euro currency 116), and caused a flight to quality, pushing gold up to $3,442.00 and Bitcoin up to 88,785. It really seems like the dark clouds surrounding the stock market are getting darker.

I’ve always worried about a major stock market reversal tied to U.S. debt and yields, but the Trump tariffs have been killing the so-called bulletproof dollar. At its low, the ES was down 3.7% and the NQ down 3.9%. The big question now is: when will the PPT (Plunge Protection Team) come to the rescue? Down 20%, down 30%, or even 40%?

Aside from Trump’s tariff headlines, there’s also a nonstop global rebalancing that is ongoing. Bonds got totally destroyed, selling off down to 112.91, down 1.48% and with the gold move both are flashing warning lights.

There’s also growing uncertainty around potential shortages and what things will cost once tariffs kick in. I read about a small but profitable company that buys its product from China at $20.00 per unit. The owner said he doesn’t know how the company can stay in business when the product jumps to $50.00 and they sell it for $38.00. I’m sure many other companies will be in similar predicaments worldwide.

Will supply chains slow? Will there be product shortages? Will everything go up in price? I think the answer is yes.

Last year, I wrote about a buddy we call Bubble. He’s been buying silver and gold for the last 15 years, and he’s been stocking up on dry food rations and bullets. I have to admit, I thought he was a bit touched, but now he looks like a genius. Not sure who he’s planning to use those bullets on, but he says he’s preparing for the worst.

Let’s face it—even if the ES and NQ stage a big rally, the odds still favor another dead cat bounce. Like I always say, no one knows what the S&P is going to do next, and it won’t do what everyone wants it to do when they want it.

So how is the S&P stacking up against the European indexes?

As of April 21, 2025 – ESM YTD Net Changes:

ESM25 (S&P 500 E-mini Futures June 2025): Approximately -12.62%
NQM25 (Nasdaq 100 E-mini Futures June 2025): Approximately -15.25%
YMM25 (Dow Jones E-mini Futures June 2025): Approximately -10.28%

As of April 17 – Europe Close for Easter Holiday:

FR4025 (CAC 40 June 2025): Approximately -1.29%
EU50 (DAX 50 June 2025): Approximately +0.80%
FTSE (FTSE 100 June 2025): Approximately -1.60%

Since 2008, the S&P has outperformed the CAC, DAX, and FTSE in 9 out of the last 16 years—2011, 2013, 2014, 2017, 2018, 2019, 2020, 2023, and 2024. Research suggests that since the 2008 credit crisis, the S&P 500 has gained more than the CAC 40, DAX, and FTSE 100 in 9 years, based on annual returns from 2009 to 2024.

This reflects the S&P 500’s relative strength in certain years, especially during recovery periods and in down markets where it lost less.

Like I said yesterday, the ES isn’t going down all year. While I understand the current trend, I still think we’ll see a sizable bounce when the markets turn. That’s when the ES will outgain the CAC, DAX, and FTSE.

Our Lean

I started to buy the ES a few minutes before the open yesterday, and after the open, the ES did pop up a bit—but it reversed fast and I got out at a small loss. I knew you were supposed to sell the rallies, and there were a few 20+ pops, but none of them lasted.

There are no economic reports today, but there are three Fed speakers and earnings before the bell from GE and Lockheed Martin, and TSLA after the bell. I want to be clear—I don’t think the downside is over, but I do think a large rally is coming down the line.

The high in the ES was 5262.50 and the low was 5127.25. That’s a 135.25-point range. Key Fibonacci levels based on that move:

50% retracement: 5194.875
38.2%: 5210.83
23.6%: 5230.581
0% (top): 5262.50

On the downside:

38.2%: 5178.91
23.6%: 5159.169
0% (bottom B): 5127.24
Extensions: 5095.33, 5075.58
50% extension: 5059.625

I have a rule that says when the ES sells off hard, it tends to bounce on Globex and trade sideways to higher after 9:30—but that depends on how big the bounce is. The ES had a nice rally off yesterday’s lows and continued higher on Globex. It’s 90 points off its yesterday’s high this morning up 26 points from yesterday’s cash close.

Our lean: That’s all fine and dandy, but one Trump headline put the ES and NQ back in a tailspin. If the ES opens 20 to 30 points lower, my lean would be to buy the open. And I think you can sell a big gap-up, but there were a lot of shorts added yesterday. Ideally, I’m still a seller of the big rips.

MiM and Daily Recap

The ES futures market faced another day of heavy selling pressure yesterday, closing sharply lower after a series of lower highs and lower lows throughout the session. Price action opened the regular session at 5257.25 and briefly pushed to the session high of 5262.50 by 9:30 AM, up 13.50 points from the pre-opening low of 5249.00 seen just 21 minutes earlier. That early strength quickly reversed, and a steep drop took ES to 5195.00 by 10:33 AM, losing 67.00 points (-1.27%) from the intraday high.

A minor bounce to 5213.75 by 10:39 AM failed to gain traction and marked a lower high. Sellers resumed control, pushing ES down to 5151.75 by 11:54 AM. A midday rally began from that low, recovering 24.75 points to reach 5176.50 at 12:39 PM, but again selling returned with force. The market dropped back down to fresh session lows of 5127.25 by 2:00 PM, the deepest print of the day and 135.25 points off the regular session high of 5262.50.

A sharp afternoon rebound followed, lifting prices to 5149.75 by 2:30 PM, then slipping to 5130.00 at 2:54 PM. However, buyers gained control late, lifting ES aggressively into the close. The rally culminated at 5193.00 by 3:57 PM, up 63.00 points (+1.23%) from the 2:54 PM low. The session settled at 5183.50 for the 4:00 PM close, a loss of 73.75 points (-1.40%) from the open and down 127.25 points (-2.40%) from the prior cash close. Cleanup trading was muted, holding flat at 5184.00.

Globex action had already set a weak tone, falling from a Sunday evening high of 5306.75 to a low of 5238.00, settling at 5257.25 before the regular open. That decline of 53.50 points (-1.01%) in Globex was a preview of the extended weakness seen in the regular session.

The tone throughout the session was decisively bearish, as every rally attempt was sold and the sequence of lower highs confirmed persistent downward pressure. Sellers maintained control across both overnight and regular hours, with the full session registering a 127.25-point decline (-2.40%) from Friday’s close.

Volume was a bit light with Europe closed with just over 1.13 million contracts traded in the full session.

Market-on-Close data showed a sell imbalance into the close, with a total imbalance of -$766M and a symbol imbalance of -69.1%, crossing the -66% threshold that denotes strong sell interest. This aggressive MOC sell flow likely helped pin prices near the lows until the late short-covering rally.

How to read the MIM

Technical Edge

MrTopStep Levels:

Fair Values for April 22, 2025:

SP: 26.91
NQ: 107.52
Dow: 158.74

Daily Market Recap 📊

For Monday, April 21, 2025
- NYSE Breadth: 14% Upside Volume
- Nasdaq Breadth: 32% Upside Volume
- Total Breadth: 29% Upside Volume
- NYSE Advance/Decline: 15% Advance
- Nasdaq Advance/Decline: 28% Advance
- Total Advance/Decline: 23% Advance
- NYSE New Highs/New Lows: 24 / 106
- Nasdaq New Highs/New Lows: 44 / 199
- NYSE TRIN: 0.95
- Nasdaq TRIN: 0.79

Weekly Breadth Data 📈

Week ending Friday, April 18, 2025
- NYSE Breadth: 58% Upside Volume
- Nasdaq Breadth: 56% Upside Volume
- Total Breadth: 57% Upside Volume
- NYSE Advance/Decline: 69% Advance
- Nasdaq Advance/Decline: 60% Advance
- Total Advance/Decline: 63% Advance
- NYSE New Highs/New Lows: 45 / 124
- Nasdaq New Highs/New Lows: 110 / 329
- NYSE TRIN: 1.54
- Nasdaq TRIN: 1.14

Trading Room Summaries

Polaris Trading Group Summary – Monday, April 21, 2025

Yesterday was all about the bears, as markets opened weak and stayed that way throughout the session. From the opening bell, PTGDavid highlighted bearish control, especially after price action broke below key levels from prior Cycle Days. Monday was officially counted as Cycle Day 3, with no carryover from Friday’s holiday closure.

Key Trades & Market Action:

@NQ Open Range Short hit both TGT 1 and final target early, marking a solid start to the day for short-biased traders.
@CL (Crude Oil) triggered a short as well, though it was later deemed a “dud” by David—highlighting the importance of reading context even when setups are textbook.
Once ES broke below 5245, bears took full control. David called it the “bottomless abyss” for longs as the decline accelerated.
S&P 500 fell 3%, Nasdaq 100 down 3.3%, with hardly any meaningful counter-bounce during the day.
Key level 5180, identified by Blibby71, was tagged, reinforcing the precision of prep and chart analysis shared in the room.
For those short from the morning, the trade was “EZ to trail stop,” as David noted—an excellent lesson in letting winners run when structure supports it.

Lessons & Takeaways:

Patience in trend days: David emphasized the difficulty of the day’s rhythm—no clean bounces, just a grind lower. This type of day tests discipline and rewards sticking with the trend.
Understanding structure: Knowing what to anticipate around Initial Balance (IB) and key fib levels helped traders navigate the chop with a plan.
Gold Shines: Amid the market bloodbath, GLD was up 3%, making it the only real safe haven.

Final Thoughts:

The day was dominated by the bears, with longs never getting a real chance. Late-day short covering helped trim losses, but markets still closed down over 2%. Not many setups in the afternoon, but the early short opportunities delivered big. As David put it, if you caught the OPR short, it was a day to manage well and ride the trend.

Let the charts guide you—today was a masterclass in staying with the momentum and managing trades with structure in mind.

Discovery Trading Group Room Preview – Tuesday, April 22, 2025

Macro Risks: President Trump escalated criticism of Fed Chair Jerome Powell, demanding immediate rate cuts and calling him “Mr. Too Late.” Any move to remove Powell could spike bond risk premiums and add downside pressure to equities.
China Trade Dynamics: Chinese port activity surged 10% YoY last week amid pre-tariff buying and electronics exemptions. China may be redirecting shipments to avoid tariffs, potentially widening the US-China trade deficit.
Tesla & Earnings: Tesla (TSLA) reports after the bell amid sagging demand and brand pressures, with shares down 44% YTD. Premarket earnings include GE, 3M, Halliburton, and Lockheed Martin; postmarket includes Capital One, ISRG, and SAP.
Economic Calendar: Key events include the Richmond Fed Index (10:00am ET) and Fed speakers Jefferson, Harker, and Kashkari throughout the day.
Market Levels & Volatility: ES maintains a short-term uptrend within a broader downtrend. Key TL resistance at 5327/17s and 5433/23s; support near 4930/40s. Volatility is elevated with a 5-day ADR of 125.5 points. No whale bias detected overnight.

ES

The bull/bear line for the ES is at 5197.25. This level marks the key pivot for the session. Trading above this favors a more bullish tone, while remaining below keeps the market under pressure.

As of the latest Globex session, ES is trading near 5224.00, showing strength above the bull/bear line. If this strength holds, bulls may look to target the upper range level of 5284.25. A sustained move above this opens the door for a further rally towards 5306.75 and possibly 5321.75.

On the downside, if ES loses 5197.25, we shift back into bearish territory. Initial support sits at 5184.00, followed by more meaningful support at 5171.25. A break below that could trigger a test of the lower range target at 5110.25. If downside momentum continues, look for additional support at 5082.50 and then the lower Bollinger band near 5020.75.

In summary, above 5197.25, the bias is bullish with upside targets of 5284.25 and 5306.75. Below 5197.25, bears are in control, aiming for 5110.25 and potentially 5082.50. Use the bull/bear line as the key reference point for intraday positioning.

NQ – Week to Week

The bull/bear line for the NQ is at 17,965. This is the key level that must be reclaimed for bullish sentiment to resume. Trading above this level would suggest strength and a potential shift back toward the recent higher consolidation.

Currently, NQ is trading around 18,069.50, indicating early strength above the bull/bear line. This puts immediate focus on resistance at 18,306.25. If buyers can push and sustain above this level, we could see a test of the 18,331.50 level, which is the upper range target, followed by stronger resistance near 18,431.50 and 18,676.50.

On the downside, if price fails to hold above 17,965 and falls back below, expect renewed selling pressure toward 17,914 and then the lower range target of 17,598.75. A breakdown below that opens the door to deeper support at 17,232.25.

Overall, bullish control remains possible while above 17,965, but momentum will need to sustain above 18,305.25 to avoid more two-sided or fading action intraday. A drop back below 17,965 would shift momentum back in favor of the bears.