Rollover, Fed Two-Day Meeting, March Quad Witching ON TAP

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Yeah! The index markets rallied, and the PitBull’s Thursday low worked despite U.S. consumer sentiment falling for the third consecutive month in March, now down 22% from December 2024 before President Donald Trump took office. The University of Michigan survey showed consumer sentiment fell to 57.9 this month, a 29-month low.

After falling for more than three weeks, led by weakness in the Tech/AI sector, NVDA rose $6.09 or +5.27%, GOOG settled up $2.89 or +1.75%, AMZN settled up $4.06 or +2.09%, AAPL settled up $3.81 or +1.82%, MSFT settled up $9.79 or +2.58%, META surged 17.48%, and TSLA settled up $17.48 or +2.96%. Other stocks also rose, with DOCU having its biggest gain of the year, up 15%, RBRK surging 28%, and ULTA jumping 15%.

I was skeptical going into the session, but the push-up on Globex and the buy stops in both the ES and NQ made it easy to run buy programs. Additionally, the mid-month rebalancing that generally happens on the 14th and the Week Two options expiration helped fuel the rally. It was a big day for the bulls, but a lot of questions remain.

This week, GTC is sponsoring a major AI conference featuring a keynote speech from Nvidia CEO Jensen Huang on Tuesday. Two days later, Huang is set to appear on a panel about the future of quantum computing alongside industry executives. A day after its earnings, D-Wave Quantum closed up 47% on Friday, and other quantum stocks jumped as well, with IONQ Inc. settling at $25.00, up 16.99%, and Rigetti Computing Inc. jumping 28.23% to $11.22. Quantum computing leverages the principles of quantum mechanics to perform calculations using qubits (quantum bits) that can exist in multiple states (superposition) and become entangled, potentially solving problems intractable for classical computers.

According to the Stock Trader’s Almanac, March is historically strong early in the month, but that didn’t happen as an avalanche of selling hit the tech sector with the Nasdaq falling 13%. The Monday before the March Quad Witching (St. Patrick’s Day) has seen the Dow drop 26 of the last 37 times. On Thursday of the week in 20200, 2020, during the COVID-19 shutdowns, the Dow lost 17.3% in a week—the worst weekly point loss and the second-worst percentage loss ever. FRYday’s March Quad Witching Day has been mixed over the last 30 years, but the NQ has been up 7 of the last 10 times.

While the government is still talking about the possibility of a recession, Treasury Secretary Scott Bessent said Sunday that the Trump administration is focused on preventing a financial crisis that could result from massive government spending over the past few years. “What I could guarantee is we would have had a financial crisis. I’ve studied it, I’ve taught it, and if we had kept up at these spending levels—everything was unsustainable,” Bessent said on NBC’s Meet the Press. “We are resetting, and we are putting things on a sustainable path.”

All I have to say about that is BS!

I think we are already in a recession, and I say there is a 50/50 chance of a credit crisis.

The week ahead is packed with economic reports—14 in total—and the FOMC meets for its two-day meeting on Tuesday and Wednesday. To this point, every rally, every pop has been a dead cat bounce, and given the ongoing economic weakness and the constant barrage of headlines, my question is: why should that change now? Late yesterday, Treasury Secretary Scott Bessent said that market corrections are “healthy,” and the ES and NQ reacted accordingly, selling off on Globex. This is a big problem for the buyers, they never know where or when the next headline is going to hit. This creates uncertainty, and we all know how much the stock market hates uncertainty.

Our lean is simple—was Friday just a one-day wonder, or the beginning of the next leg up? Most people think there is more room on the upside, and there may be, but until the overall price action changes, I think there is still downside risk. That doesn’t mean I wouldn’t buy a big gap down for a trade, and it doesn’t mean we can’t rally today, but I have to stick with selling the big rips.

With the rollover starting today, the Fed meeting, March Quad Witching on Friday, and all the shorts in the market, my guess is we could see some big two-way price action. That said, there is a lot of headline risk out there!

From Goldman Sachs:

Will Tariffs Spark Higher Inflation?

President Donald Trump’s administration has “signaled a willingness to take larger risks than the first time around,” raising the prospect of more substantial tariff increases, according to Chief U.S. Economist David Mericle in the latest episode of Goldman Sachs Exchanges. As a result, Goldman Sachs economists now expect the average U.S. tariff rate to increase by 10 percentage points or more, which is likely to drive consumer prices higher.

The higher tariff assumptions suggest that the Federal Reserve’s preferred measure of inflation, core PCE, will rise to about 3%, Mericle notes. While tariffs on their own represent a one-time change in price levels rather than a sustained shift in inflation trends, he warns that trade policy concerns could trigger broader changes in inflation expectations, given the heightened attention from both consumers and businesses.

“It is, I think, a little bit of a surprise relative to what I might’ve expected several months back, just how focused businesses and consumers are on tariffs,” Mericle says. “I would say at the very least this is something to keep an eye on—the risk of tariffs sparking broader price increases.”

Beyond inflation concerns, larger tariffs are also expected to weigh on economic growth. Mericle’s team at Goldman Sachs has cut its 2025 GDP growth forecast (on a Q4/Q4 basis) from 2.2% to 1.7%. In addition to the tax-like effect of tariffs on disposable income and consumer spending, the uncertainty surrounding tariffs is likely to have a greater impact than previously anticipated, discouraging business investment more than expected just a few months ago.

“The uncertainty that tariffs introduce is probably going to have a larger effect, discouraging business investment [more] than I would’ve thought a couple of months ago,” Mericle tells Exchanges host Allison Nathan.

MiM and Daily Recap

The S&P 500 futures market began Friday’s overnight Globex session at 5540.00 and dipped to 5538.75 before recovering to a premarket high of 5588.00 after news releases at 8:30 a.m. By the time the regular session opened at 9:30 a.m. ET, prices stood at 5572.00, up modestly from the prior close. After the bell, the ES made a quick swing low around 9:33 near 5568.50 and then pushed to 5607.75 by 9:54, marking a 39-point climb (0.70% from its preceding swing). Just minutes later, sellers reemerged and drove the market down to an intraday low of 5564.00 at 10:00 a.m. after the release of a disappointing Michigan sentiment number.

Momentum turned decisively bullish mid-morning, carrying the futures to 5635.50 by 11:45—an impressive 71-point advance (1.29%) from the earlier low. A modest midday pullback found support at 5611.00 around 12:27, shedding roughly 24 points (-0.43%), but it proved short-lived as buyers lifted the market to a fresh high of 5639.00 by 1:03 p.m. Another dip surfaced near 1:48 p.m. to 5615.50 (-23.50, or -0.42%), followed by a bounce to 5628.25 at 2:06 p.m. A subsequent decline to 5613.00 at 2:24 p.m. kept the tape choppy into early afternoon.

In the final stretch, renewed buying pressure emerged, driving the ES to a peak of 5645.75 around 3:14 p.m. The market then faded slightly to 5621.75 by about 4:21 p.m. during the cleanup session. Settlement printed at 5637.50, which marked a 109.25-point gain (+1.98%) from the previous day’s cash close. Volume was fairly robust, with the regular session trading over 1.2 million contracts and total volume surpassing 1.5 million. Overall, the day’s action featured multiple intraday swings, but bulls carried the ES steadily higher from morning into the close.

Sentiment skewed firmly bullish throughout the day, as evidenced by the market’s steady net gain and its ability to shrug off periodic pullbacks. The larger technical backdrop appeared supportive, with each minor dip finding willing buyers who pushed price to higher intraday peaks. By the close, the ES had solidified a nearly 2% gain relative to the prior settlement, underscoring broad-based strength.

On the Market on Close front, imbalance data showed a net buy tilt of 64.6% by symbol count. The moderate buy-side skew likely helped stabilize prices into the bell, but it did not spark any dramatic last-minute rally.

Note: One item to clarify is the “quick swing low” at 9:33 a.m. near 5585.30, which is above the reported open of 5572.00. This could indicate either a data entry error or that the session briefly traded below 5572.00 prior to 9:33 a.m. Double-checking these figures might be necessary for full accuracy.

How to read the MIM

Technical Edge

Fair Values for March 17, 2025:

Daily Breadth Data 📊

Weekly Breadth Data 📈

Guest Post

DLC Risk Management March 2025 Update

Room Summaries:

Polaris Trading Group Summary Friday, March 14, 2025

Morning Session:

Afternoon Session:

Key Lessons & Takeaways:

Final Reminder:

Overall, a fantastic day for bullish traders.

DTG Room Preview – Monday, March 17, 2025

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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!