Market analysis for April 21st, 2025

Inside candle week

Welcome back traders. I hope you all had a good Easter break. Both my Mother-in-law and my Mom had some bad health issues over the weekend. It's just a reminder to us what's really important in life. Tell the ones you love how much they mean to you.
We had an inside candle last week on the weekly charts. That's the first one in a month. Inside candles are tricky. Does it mean that the crazy moves and high volatility are done with? Maybe. It can also mean that its just a consolidation and a pause before the next storm. Futures aren't dissapointing this morning with the /NQ down almost 300 points.

Thurs. was a bust for me. I had an SPX roll from Weds. If that would have hit it would have been a solid day but not only did it not hit but I added to the losses with some churning positions early in the day. Scalping continues to work well. In addition to our profits from Thurs. we're sitting on about $1,400 of unrealized profits now on our short /MNQ. I'll likely keep working this position until the market finds a bottom. Here's a look at my day last Thurs.

We are off to a better start today, as I mentioned, with our first 1HTE trade looking good for a 7% ROI and scalping already cash flowing nicely today with our short.
Let's get into our trade docket for today and this week. We are back to some of our regular trades this week so make a note of the upcoming dates.

Todays docket will focus on our 1HTE BTC trades, SPX 0DTE and Scalping on our short /MNQ but things will pick up this week. Tomorrow will start a GLD/SLV pairs trade (tune in to zoom today to see the setup). We should also have a good chance at the same amazing Nat Gas trade that we had last month. I'm not sure it will be a 99.5% POP but it should be close. That setup could come as early as tomorrow but likely Weds. We'll also look to trade TSLA, GOOG, PM, IBM, VZ, T, ISRG, BA, MRK, ABBV, INTC earnings this week.

une S&P 500 E-Mini futures (ESM25) are down -1.09%, and June Nasdaq 100 E-Mini futures (NQM25) are down -1.23% this morning, pointing to a sharply lower open on Wall Street as U.S. President Donald Trump’s threats to fire Federal Reserve chief Jerome Powell weighed on sentiment.
On Friday, National Economic Council Director Kevin Hassett stated that President Trump is examining whether he’s able to fire Powell. A day earlier, Trump posted on social media that Powell’s removal “cannot come fast enough,” while ramping up pressure on the central bank to lower interest rates. Such remarks have stoked worries about the Fed’s independence, dampening investor sentiment. 
This week, investors look ahead to key U.S. economic data releases, remarks from Federal Reserve officials, and a slew of corporate earnings reports, with a particular focus on results from “Magnificent Seven” stalwarts Tesla and Alphabet.
In Thursday’s trading session, Wall Street’s major equity averages ended mixed. UnitedHealth Group (UNH) plummeted over -22% and was the top percentage loser on the Dow and S&P 500 after the managed care giant posted downbeat Q1 results and cut its FY25 adjusted EPS guidance. Also, chip stocks lost ground, with Nvidia (NVDA) and Broadcom (AVGO) sliding more than -2%. In addition, Alcoa (AA) slumped about -7% after reporting weaker-than-expected Q1 revenue and cautioning that tariff-related costs are expected to increase significantly. On the bullish side, Eli Lilly (LLY) surged more than +14% and was the top percentage gainer on the S&P 500 after the company posted Phase 3 trial results for its oral GLP-1 drug, orforglipron, that met primary and key secondary endpoints.
Economic data released on Thursday were mixed. The U.S. Philly Fed manufacturing index tumbled to a 2-year low of -26.4 in April, weaker than expectations of 2.2. Also, U.S. March housing starts fell -11.4% m/m to 1.324M, weaker than expectations of 1.420M, while building permits, a proxy for future construction, unexpectedly rose +1.6% m/m to 1.482M, stronger than expectations of 1.450M. In addition, the number of Americans filing for initial jobless claims in the past week unexpectedly fell -9K to a 2-month low of 215K, compared with the 225K expected.
New York Fed President John Williams stated on Friday that the U.S. economy is in a “very good place,” and he does not see the need to adjust interest rates “any time soon.” “We need to make sure that any one-time changes in prices don’t pass through into more persistent, higher inflation,” Williams said during an interview on Fox Business.
Meanwhile, U.S. rate futures have priced in an 89.0% probability of no rate change and an 11.0% chance of a 25 basis point rate cut at the next central bank meeting in May.
First-quarter corporate earnings season kicks into high gear this week, with investors awaiting fresh reports from major companies such as Tesla (TSLA), Alphabet (GOOGL), Philip Morris (PM), IBM (IBM), Verizon (VZ), AT&T (T), T-Mobile US (TMUS), Intuitive Surgical (ISRG), Lockheed Martin (LMT), Boeing (BA), GE Aerospace (GE), 3M (MMM), Thermo Fisher Scientific (TMO), ServiceNow (NOW), Texas Instruments (TXN), The Procter & Gamble Company (PG), Merck&Co (MRK), PepsiCo (PEP), AbbVie (ABBV), Gilead (GILD), Bristol-Myers Squibb (BMY), Intel (INTC), and Colgate-Palmolive (CL). 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.
Market watchers will also be closely monitoring the preliminary U.S. purchasing managers’ surveys for April for indications of how businesses are responding to President Trump’s announcement of sweeping tariffs. Other noteworthy data releases include the U.S. Richmond Fed Manufacturing Index, New Home Sales, Crude Oil Inventories, Durable Goods Orders, Core Durable Goods Orders, Initial Jobless Claims, Existing Home Sales, and the University of Michigan’s Consumer Sentiment Index. 
“The PMI report will be very interesting amid the growth concerns from the trade uncertainty that could show up in lower new orders,” Danske Bank analysts said in a note.
In addition, the Fed will release its Beige Book survey of regional business contacts this week, which provides an update on economic conditions in each of the 12 Fed districts. The Beige Book will offer insight into the extent to which government policy and uncertainty are affecting business decisions. Notably, the report is published two weeks before each meeting of the policy-setting Federal Open Market Committee.
A host of Fed officials will be making appearances throughout the week, including Goolsbee, Jefferson, Harker, Kashkari, Kugler, Waller, and Hammack.
Today, investors will focus on the Conference Board’s Leading Economic Index for the U.S., which is set to be released in a couple of hours. Economists expect the March figure to be -0.5% m/m, compared to the previous number of -0.3% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.336%, up +0.21%.
Major European markets are closed today in observance of Easter Monday.

Let's take a look at the technicals to start off the week. You can really make a case for continued bearishness or bullishness, depending on the time frame you look at. 

With an inside weekly candle it does look like the market is bottoming and getting ready to form a buy signal. The weekly chart is not a "full blown" buy signal but it's getting there. 

The daily chart? Well, that still looks pretty bearish. In fact, it's flashing a slight sell signal this morning.

Technicals are, not surprisingly, bearish with the /ES down -60+ and /NQ down -260+ as I type. 

It's really a battle today. Bullish longer term. Bearish near term. Futures hammered down this morning. I'm going to look for more of a neutral day today unless we get a news catalyst...which is incredibly likely. Do we get some good news on a deal with China? That would be bullish. Does Trump continue to jawbone the FED? That's largely what's sending futures down this morning. That would be bearish.  We also have a ton of big earnings reports out this week. Lots of FED speak this week as well. 
Let's look at some market internals:
Markets calmed down a bit last week, as the major indices printed an inside weekly candle, even amid rising geopolitical headwinds. Semiconductor stocks took a hit after news broke that U.S. chipmakers would face fresh export restrictions to China, dragging the market lower midweek and confirming another lower high. Later that day, Fed Chair Powell warned that the tariffs could stoke inflation and weigh on economic growth, causing the markets to slide. His comments prompted a sharp rebuke from former President Trump, who called for Powell’s removal.

​The SPY closed the week at $526.41 (-1.39%), printing an inside candle on the weekly chart for the first time all year. The RSI With Seasonality Indicator showed an oversold reading during a historically strong week, allowing traders to take a breather. The SPY is stabilizing at its 100-day EMA, but as we know too well, volatility can reemerge from a single headline.

​Semiconductor volatility hit QQQ last week as it closed down at $444.10 (-2.27%), driven by the new chip export restrictions to China. However, even though the bullish momentum stalled, the QQQ has shown strong support at the 2022 highs. Paired with an oversold weekly RSI, tech traders will be watching key Q1 earnings reports as a gauge for strength in the sector

​Small-cap investors caught some relief last week as IWM closed higher at $186.48 (+1.18%), and has a strong 70% historical win rate coming up this week. Unlike its large-cap peers, the IWM has already been trading in its 2022 range, and is much further below its all-time high. With volatility declining and small-caps starting to outperform, traders are left wondering if this is potentially a sign of a risk-on environment.

Expected moves for the week:
Volatility is still sky high. With the expected move of the SPY not much less than QQQ I think I'll stick to the SPX for our 0DTE's this week.

Let's take a look at the intra-day levels:
​/ES: With futures down this morning, we are smack dab in the middle of a range. 5298 is first resistance with 5342 next. 5221 is first support with 5178 next.

/NQ: Nasdaq is a bit weaker than SPX right now. 18,318 is first resistance with 18,542 next. 17,984 is first support with 17,754 next.  Our trigger for rolling out and down our /MNQ cover is 18,063 level.

BTC: Bitcoin hit for a 7% profit this morning on our 1HTE. We may be able to get a few of these on today. Extremely interesting price action this morning in BTC. A huge decoupling from the dollar. We'll spend some time looking at this in zoom today.  88,000 is resistance with 86,969 first support and 86,089 next. 

I'll see you all in the live trading room shortly!