on May 2, 2025

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Our View

I’m going to do more play-by-play. I just told the chat I’m an early seller. Meta and Microsoft roared higher, but McDonald’s missed. The YM is up 0.50%, the ES is up 0.51%, and the NQ is up 0.68%.

The ES made a high of 5662.25 on Globex, with 195k ES traded at 9:18. The stats for the day were slightly bullish, but I was looking to sell the open or the early push. The ES opened higher and—guess what?—it sold off and then ripped higher. I know I sometimes write too much, but I’m trying to provide you with a feel.

I don’t know how accurate it is, but the talking heads say the 2025 stock market crash most resembles the 2020 COVID-19 breakout crash. No matter what anyone thinks, I’m a bull guy. I love buying the falling knives when the ES is in an uptrend, and I especially love it when the Fed is pumping in all the quantitative easing like they did during the 2008 Credit Crisis.

Yesterday’s trade has been a mishmash—open higher, sell off, rally, and then a high at 5682.50! Yep, seeing is believing. Then it fell into a downward selloff, one of the slowest in weeks, down to the 5640 level. It popped up to the 5665 area, then sold off and popped again.

Despite the stats suggesting the gap would fill and the ES would close near unchanged, that hasn’t happened. It looks like the ES is on its way to its eighth consecutive higher close in a row!

I was just thinking—what is this going to look like in July and August when volumes really drop? The ES was trading in the 5660–63 area and the MIM showed $350 million to buy when I put this out after the imbalance in the MrTopStep chat:

IMPRO : Dboy : (3:56:40 PM) : already rallied
IMPRO: Dboy : (3:56:48 PM) : sell the news

After the close, Amazon beat expectations after its ad business grew 19% in the first quarter and then sold off $10. The ES sold all the way down to 5601.75 after 4:00, then rallied back up to the 5622 level.

Gold fell $100, the dollar rallied, while bonds and notes fell.

Our Lean

I asked @HandelStats what typically happens after an 8-day rally, before the ES and NQ sold off, and here’s what he came up with:

Since 1980, the $SPX has had 8 consecutive up days only 15 times. A 9-day run has happened just 4 times, 10 days only 2 times, 11 days also 2 times, and 12 days in a row just once. A 13-day rally? Never happened, but Handel said there was a 14-dayer, but I’m not sure about that, maybe it was further back than 1980. He also told me the ES was going to trade unchanged before the end of the day.

The ES was trading in the 5660–63 area. The MIM showed $350 million to buy, then the ES sold off, dropping all the way down to 5601.75, which was a big discount to the S&P cash. It then rallied up to 5622 at 4:23. Between making a new high, a weak MIM, and the earnings reaction, it was a clear “sell the news” event.

Our lean: Most times when the ES trades at a big discount to the S&P cash like it did after the 4:00 cash close, it generally bounces.

Rich from @HandelStats called me and I asked him to run job stats. He said that since 2008, the day of the May jobs report has been up 12 times, down 4, and unchanged once. And if the Thursday before the jobs report was up, it’s always been up on Friday. I hope that holds because MrTopStep has a trading rule called “Counter-Trend Friday,” basically a fade off the 9:30 jobs gap. Ideally, I want to buy the down open and see how far I can squeeze it.

I also think it will be another two-way trade, big dips and rips. If the ES opens higher, I would look to sell the early rallies and buy the big drops.

I want to point out that the ES has rallied almost 550 points from the Monday, April 25 low of 5127.75. It’s 9:45, and the ES just traded all the way up to 5672.50, up 0.78%. Be careful today, I think there are going to be some surprise Trump headlines.

MiM and Daily Recap

ES futures saw early volatility during the overnight Globex session, bottoming at 5615.00 before staging a sharp rebound into the cash open. As the regular session began at 9:30 AM, price was trading around 5645.00, with an immediate thrust higher reaching 5651.00 by 09:31 AM. That move stalled, and a pullback to 5631.50 printed a low at 09:33 AM.

After another chop of 25 points either way, markets sat at 5627.25 at 9:57. From there, buyers took control and powered ES to the session high of 5682.50 by 11:15 AM, a 55-point advance from the morning low (+0.98%). However, the rally was short-lived. Bears pressed the tape lower, and by 12:15 PM, price had retreated to 5631.50, giving back 51.00 points (-0.90%) from the high.

The midday recovery lifted ES to 5660.75 at 13:21 PM, but the bounce faltered again, leading to a pullback to 5639.75 at 13:45. A final afternoon push brought price to 5668.25 at 14:45, which marked a lower high. A subsequent lower high of 5665.75 at 15:48 failed to spark further upside, and sellers swiftly took over.

The closing hour saw a sharp liquidation, with ES falling to 5601.75 at 16:09 PM—down 64.00 points (-1.13%) from the last high. A late bounce into the cleanup session reached 5628.00 by 16:30, before the market settled at 5611.75.

On a session basis, the full-day close marked a small loss of 5.75 points (-0.10%). The regular session closed at 5625.00, up 41.00 points or +0.73% from Wednesday’s settlement of 5584.00. However, the open-to-close move for the regular session was down 20.00 points (-0.35%), showing intraday weakness despite the net gain.

Thursday’s market exhibited a two-way structure: Globex strength transitioned into a volatile cash session that featured both breakout attempts and fast reversals. Despite a strong push early in the day, the failure to sustain highs and the steep closing drop suggest cautious sentiment.

Volume was active, with over 1 million contracts trading in the regular session and 1.3 million across the full day. This activity highlighted aggressive repositioning and responsive participation on both sides.

The Market-on-Close imbalance strongly favored buyers, with $1.79B to buy (96.1% dollar-weighted and 87.4% of symbols), signaling institutional appetite. Yet, the heavy imbalance failed to produce a rally, as the 3:50–4:00 PM window saw continued selling into bids, suggesting overhead supply was being absorbed rather than lifted.

In summary, the day ended with price settling near session lows despite a large MOC buy imbalance. Bulls held the prior session’s gains on a closing basis, but the late-day liquidation leaves the market vulnerable heading into Friday’s trade.

How to read the MIM

Technical Edge

Fair Values for May 2, 2025

SP: 22.13
NQ: 93.7
Dow: 111.91

Daily Breadth Data 📊

For Thursday, May 1, 2025

NYSE Breadth: 51% Upside Volume
Nasdaq Breadth: 60% Upside Volume
Total Breadth: 59% Upside Volume
NYSE Advance/Decline: 55% Advance
Nasdaq Advance/Decline: 55% Advance
Total Advance/Decline: 55% Advance
NYSE New Highs/New Lows: 27 / 26
Nasdaq New Highs/New Lows: 83 / 70
NYSE TRIN: 1.17
Nasdaq TRIN: 0.80

Weekly Breadth Data 📈

Week Ending Friday, April 25, 2025

NYSE Breadth: 63% Upside Volume
Nasdaq Breadth: 67% Upside Volume
Total Breadth: 66% Upside Volume
NYSE Advance/Decline: 80% Advance
Nasdaq Advance/Decline: 79% Advance
Total Advance/Decline: 79% Advance
NYSE New Highs/New Lows: 65 / 128
Nasdaq New Highs/New Lows: 162 / 313
NYSE TRIN: 0.89
Nasdaq TRIN: 0.91

Guest Posts:

SpotGamma Founders Note:

Get instant access to our partners’ real-time market data and insights not available anywhere else. Here is last night’s Founder’s note getting you ready for today’s market and explaining the constraints in yesterday’s market. – MrTopStep

Founder’s Note:

Futures are 44bps higher ahead of 8:30AM ET NFP.

Post ER: AAPL -3%, AMZN flat.

Today’s 0DTE straddle is a heavy $67/1.1% or 46% IV, which is a sharp departure from the underpriced 0DTE straddles into ISM & PCE.

This infers the market places a great deal of importance on this print, as any expiration out past today has a much lower, ~23% IV.

Should NFP come in hot, then we see little support until the 5,500 area. To the upside, there are quite frankly no material strikes of any kind until 5,800 – and 5,800 is large dealer short gamma strike. We’d estimate that a potential upside move would come in at the 0DTE straddle level of 1.1%, roughly aligning with 5,700. The other dynamic in a positive NFP would be trader looking to further sell vol into the weekend.

We don’t want to further belabor the point that volatility is underpriced. As per last nights note, we pointed out that IV now has seemed to hit a floor around 23%, and skew is twisting towards puts.

Both yesterday & today also had rather quiet close to close SPX performance, with +64bps and +10bps respectively. But that masked huge intraday moves of +2.3% on Wed and1.6% yesterday (i.e. there has been huge mean reversion masking intraday vol).

To place into context how epic the intraday swings have been, we plotted SPX intraday range (daily high-low / close) since Jan ’20. As you can see, April 9th intraday move of 10.7% was the largest intraday range in the past 5 years – including the Covid Crash!

We also see that the current level of intraday vol is essentially what we sustained in ’22 – and we think that level is a “fair value” for the period we are currently in. We’d make the case this is an environment of extended “uncertainty”/repricing, like ’22, but arguably not “panic” (panic was in early April).

The point here is that we expect volatility to remain at or above current levels, and that huge intraday rallies are just a feature of this current regime. That view stands until deals are signed, economic data is stable, and liquidity returns.

Get instant access to our partners real-time market data and insights not available anywhere else. Here is last night Founder’s note getting you ready for today’s market and explaining the constraints in yesterday’s market. – MrTopStep

Trading Room News:

Polaris Trading Group Summary – Thursday, May 1, 2025

Yesterday’s trading session was a textbook example of disciplined execution within a structured market rhythm, guided effectively by PTGDavid. The session kicked off with strength, as both the ES and NQ futures fulfilled their overnight DTS Briefing targets (5650 for ES and 19985 for NQ), setting a confident tone for the day.

Key Highlights & Positive Trades:

CL OPR Long trade early in the session saw Target 2 filled, marking a strong start.
PTGDavid emphasized Cycle Day 2 expectations of early movement around the MATD and an Open Range (OR) of 32–52 handles, which aligned well with price action.
Bullish lean confirmed: David authorized dip buying as long as price stayed above the prior high (PH), OR mid, and VWAP. This guidance proved accurate.
A major milestone was hit with a “BOOOM” call at 10:56 AM as the 5673 target was tagged, fulfilling the projected bullish scenario of price sustaining above 5620.
A further move saw the 5677 target also reached, reinforcing the effectiveness of David’s forecast.
The market moved in what David called a “grindstone” rhythm, slow and methodical, adhering closely to the expected Cycle Day 2 playbook – dip to support followed by a rally.

Educational Notes & Lessons:

David’s callouts and price levels were precise, demonstrating the value of adhering to the Daily Trade Strategy (DTS) and Cycle Day models.
Emphasis on discipline and rhythm awareness (grindstone mindset) was a valuable psychological cue, especially in a slow-moving market.
The session served as a strong reminder to focus on execution, not excitement – a quiet market can still produce profitable opportunities for prepared traders.

End-of-Day Notes:

The afternoon saw balancing/consolidation, typical of Cycle Day 2.
Final hour noted a $3.2B MOC Buy Imbalance, yet the market sold off into the close – a possible trap for unprepared traders.
PTGDavid reminded the room of tomorrow’s Non-Farm Payrolls and his absence from the morning session due to a doctor appointment.

Overall: A solid day of guided, disciplined trading. Bullish targets hit with precision, and David’s leadership helped members stay on the right side of the market. A grind-it-out session with great learning value in sticking to the script.

DTG Room Preview – Friday, May 2, 2025

Global Markets:
- Stocks lifted overnight on hopes for US-China trade de-escalation; China signaled willingness to evaluate tariff policies.
Tariff Developments:
- Tariff exemptions for small parcels under $800 expired today.
- Retailers like Space NK and Understance halted US shipments to avoid extra costs.
- Trade experts warn of unsustainable cost increases, with some businesses exiting the US market.
Retail Impact:
- Oh Polly raised US prices by 20%.
- Shein acknowledged pricing changes but aims to remain affordable.
- Temu pushing ‘Local’ labeled products already in the US to bypass tariffs; inventory is finite.
- Both Shein and Temu have cut US digital ad spend and expect revenue declines.
Corporate Earnings:
- Apple (AAPL) beat expectations but reported weak China sales and warned of a $900M tariff hit.
- Amazon (AMZN) also beat on earnings but issued soft guidance, sending shares lower.
- Premarket reports due from: Chevron (CVX), ExxonMobil (XOM), Shell (SHEL), APO, MT, DD, ETN, NWG, TROW, CI, WLK.
Economic Calendar:
- April Jobs Report at 8:30am ET.
- Factory Orders at 10:00am ET.
Market Technicals:
- S&P 500 (ES) volatility continues to contract; 5-day ADR remains high at 102.25.
- No dominant whale activity noted overnight.
- ES in short-term uptrend; 50-day MA (5626.25) is key pivot level.
- Trendline resistance: 5823/28s.
- Trendline support: 5510/15s, 5220/25s, 5110/05s, 4950/60s.

The bull/bear line for the ES is at 5624.00. This is the key pivot level to watch today. Trading above this level favors bullish continuation, while staying below signals weakness.

Currently, ES is trading around 5648.75 in the pre-market session, indicating a recovery above the bull/bear line. If price can hold above 5624.00, bulls may target the upper intraday range resistance at 5694.50, but must first overcome resistance at 5682.50 and 5688.25. A breakout above that could set up a further push toward 5720.00 and then the R1 resistance at 5760.50.

On the downside, initial support lies at 5617.50 and 5611.75. If sellers regain control below the bull/bear line of 5624.00, watch for a move down toward the lower range target at 5553.50. A breach of that level could extend declines toward deeper support at 5487.25 and 5442.75.

Overall, sentiment leans bullish above 5624.00, but bears may regain control if the market breaks back below that level with momentum. Use the intraday levels to gauge continuation or reversal opportunities.

The bull/bear line for the NQ is at 19,856.00. This is the critical pivot that determines directional bias for today’s session. If price holds above this level, bullish continuation remains favored.

NQ is currently trading around 19,930.00 in the premarket Globex session, which is above the bull/bear line. If this strength continues into the open, the next resistance level to watch is 20,127.75, followed by 20,165.50, which marks the upper range target. Above that, a breakout could push toward the next resistance at 20,457.00.

On the downside, if NQ slips back below 19,856.00, it opens the door for a move toward initial support at 19,834.00, then 19,799.00 and 19,757.25. A break below these levels increases the probability of a test of deeper support at 19,546.50, which now serves as the lower range target. Continued weakness could then bring 19,255.00 into play. Below that level, further support lies near 19,003.25 and deeper at 18,654.25.

Overall, NQ maintains a bullish bias above 19,856.00, with dip-buyers likely stepping in toward support zones. However, failure to hold that level could reverse sentiment quickly and trigger a test of lower support levels.

Calendars

Economic Calendar Today

This Week’s High Importance

Earnings:

Full Calendars

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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!!