April 29th, 2025

What does a great trade look like?

I think defining it could (or should) be easy. Executing it? That's tougher. In my mind a great trade is simply based around risk/reward. Let's talk risk first. We try so hard to minimize it, reduce it, even eliminate it but I think that is a flawed approach. We want risk! We need risk. Without risk we get no reward.  There is a reason why we can make 200% more in 6 hrs. than you can make all year, at the bank with a C.D. The former has risk. The latter does not. The key is to maximize your reward potential while holding your risk to an acceptable level. What's acceptable? Well, that varies from trader to trader. I try to keep our risk around $500 dollar per 0DTE entry. I believe yesterdays SPX 0DTE met the qualifications well. It had over $2,000 of max profit potential  with a max risk of approx. $565. Those are ratios we can work with. We didn't hit our $2,000 max potential but it was an easy day of trading without stress. Do yourself a favor. Focus on risk first and profit second.
Here's a look at our day. If every day was like this is would be amazing. Our risk never got above $220 dollars.

A couple items of note today: I've got, what should be, my last eye appt. this morning at 10:30 A.M. MDT so there we be a little break in the zoom feed today. I'll take my laptop with me so hopefully the break is minimal.
We'll also have a training later today on the lessons from one of my favorite trading books of all time: Tom Hougarrds "Best loser wins". I've got a copy of the book for each of you and I've put a power point together to hit the bullet points.

Let's take a look at the markets: Buy signal is still holding, although futures are selling off this morning.

We are trying to get above a key consolidation level but all the work of the last four days is getting tested this morning with the futures and ADP employment numbers. 

VTI may be one of the best gauges. We've got five days of bullish action. It's at a key level BUT...most of the technicals look stretched here. Most going into overbought zones. 

​une S&P 500 E-Mini futures (ESM25) are trending down -0.30% this morning as investors cautiously await a barrage of U.S. economic data, including the Fed’s favorite inflation gauge and the first estimate of first-quarter GDP, as well as earnings reports from “Magnificent Seven” companies Microsoft and Meta.
Some negative corporate news is weighing on stock index futures, with Super Micro Computer (SMCI) tumbling over -14% in pre-market trading after the artificial intelligence server maker reported weaker-than-expected preliminary FQ3 results. Also, Starbucks (SBUX) slid over -6% in pre-market trading after the coffee chain posted weaker-than-expected FQ2 results.
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Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.On the trade front, U.S. President Donald Trump on Tuesday signed two executive orders intended to ease the impact of his auto tariffs, while his Commerce Secretary Howard Lutnick told CNBC that the U.S. had reached its first trade deal with an undisclosed country.
In yesterday’s trading session, Wall Street’s three main equity benchmarks closed higher. SBA Communications (SBAC) climbed over +6% and was the top percentage gainer on the S&P 500 after raising its full-year revenue guidance. Also, Honeywell International (HON) advanced more than +5% and was the top percentage gainer on the Dow after the industrial conglomerate reported stronger-than-expected Q1 results and raised the lower end of its full-year adjusted EPS guidance. In addition, Cadence Design Systems (CDNS) rose over +5% and was the top percentage gainer on the Nasdaq 100 after the company lifted its full-year guidance. On the bearish side, NXP Semiconductors N.V. (NXPI) slumped more than -6% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the semiconductor firm announced a new chief executive officer and warned it was navigating “a very uncertain environment” due to tariffs.
A Labor Department report released on Tuesday showed that the U.S. JOLTs job openings fell to a 6-month low of 7.192M in March, weaker than expectations of 7.490M. Also, the U.S. Conference Board’s consumer confidence index fell to a nearly 5-year low of 86.0 in April, weaker than expectations of 87.7. In addition, the U.S. February S&P/CS HPI Composite - 20 n.s.a. eased to +4.5% y/y from +4.7% y/y in January, weaker than expectations of +4.6% y/y.
“Many are still calling for a recession and even lower equity levels, but we think the ‘Trump put’ is real for equities while the ‘Fed put’ is real for the economy. And while tops and bottoms are hard to recognize as they are happening, we think the worst is behind us,” said Andrew Brenner at NatAlliance Securities. 
Meanwhile, U.S. rate futures have priced in a 92.3% probability of no rate change and a 7.7% chance of a 25 basis point rate cut at May’s monetary policy meeting.
First-quarter corporate earnings season rolls on, with investors looking forward to fresh reports from major companies today, including Microsoft (MSFT), Meta Platforms (META), Qualcomm (QCOM), Caterpillar (CAT), and KLA Corp. (KLAC). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +6.7% increase in quarterly earnings for Q1 compared to the previous year.
On the economic data front, all eyes are on the Commerce Department’s first estimate of gross domestic product, set to be released in a couple of hours. Economists, on average, forecast that U.S. GDP growth will stand at +0.2% q/q in the first quarter, compared to the fourth-quarter figure of +2.4% q/q.
Investors will also focus on the U.S. core personal consumption expenditures price index, the Fed’s preferred price gauge. Economists expect the core PCE price index to be +0.1% m/m and +2.6% y/y in March, compared to the previous figures of +0.4% m/m and +2.8% y/y.
The U.S. ADP Nonfarm Employment Change data will be closely monitored today. Economists foresee the April figure coming in at 114K, compared to the March figure of 155K.
U.S. Personal Spending and Personal Income data will be reported today. Economists anticipate March Personal Spending to be +0.6% m/m and Personal Income to be +0.4% m/m, compared to February’s figures of +0.4% m/m and +0.8% m/m, respectively. 
The U.S. Employment Cost Index will be released today. Economists expect this figure to arrive at +0.9% q/q in the first quarter, matching the fourth quarter’s figure.
U.S. Pending Home Sales data will come in today. Economists forecast the March figure at +0.9% m/m, compared to the previous figure of +2.0% m/m.
The U.S. Chicago PMI will be released today as well. Economists expect this figure to come in at 45.9 in April, compared to the previous value of 47.6.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.161%, down -0.31%.

Trade docket today: No 1HTE's today. We need move movement. We have META and MSFT earnings trades later today. Scalping is already working with a long /MNQ and /NQ cover. We'll try to get both a SPX and NDX 0DTE today. Same as yesterday. Focus on SPX with a late day entry on NDX.

My bias of lean today is more neutral. Futures are down -50 points on /ES and -250 on /NQ as I type. We are still waiting for PCE numbers which will be the big one for this morning. The futures are already unhappy about the poor GDP numbers out this morning. PCE could really send us moving up or down when it comes out. My key level...once again, is 5554 on /ES above is bullish. Below is bearish. We are below it now. I think the market will have a tough time going higher today and I don't think we get much additional downside than what the futures are already giving us.

Let's take another look at the /ES intra-day levels and talk about our plan for today: One the daily chart is sure looks bearish. A rejection of my key level and indicators rolling over. 

On an intra-day basis 5523 is current resistance with 5492 support. I'll update these levels as the day moves on, inside discord.

With futures down now over -70 points on /ES, as I type that means we've got great premium today. I'm looking forward to seeing you all in the zoom shortly.