Market analysis for April 23rd, 2025

China/Powell/Musk/Ceasfire

All the news catalyst came together last night to explode the futures higher. Talk of China/US being "nice" to each other, Trump saying he would not fire Powell. Musk saying he'd backout of Governmental duties and last but not least, talk of a cease fire in the Russia/Ukraine war. All this seems to have coalesed to explode the futures higher.
Is this the turning point in this bearish trend? Maybe. Maybe not. It's a big move with /ES up 133 and /NQ up 540 as I type this. If we take a look at the daily chart on /ES, it's clearly a massive move. We rarely get a gap (up or down) on futures. It's one of the reasons most traders use them vs. the SPX for technical analysis. What sticks out to me most here is the fact that we are now back to the support level of Sept. 2024. We've tried to break above this level a half dozen times this month. Each effort has failed. It's a bit depressing to say but it looks like we may still need to wait to see if this push up is for real. A push above 5562 on /ES would confirm to me that the bulls are back.

I'm reminded of something I was taught many years ago. #1. Never read too much into a one day move (up or down) in terms of the overall trend. #2. Remember, the big, massive moves (either up or down) usually happen in bearish markets. In healthy bull markets we usually get more predictable, calm moves. I had a bearish /NQ posiiton left from my scalping last night and closed that early this morning for a $1,175 loss. I've re-established a short /MNQ when the market was up 500+ points this morning. I think the chance we give some of this gain back is real.
Let's look at my day yesterday. I tried three debit setups on SPX and only one worked. I hit my risk level of $500 dollars pretty quick so I was done. I needed one more to hit. That was fine. I ended up with a -$600+ loss on SPX, which is managable but I took a big overnight swing on BTC that lost. We've had a great year trading BTC and I was playing with some house money but it still hurts. The BTC/dollar decoupling is amazing to watch play out. It's too early to tell but BTC could be ready to launch back above that key 100K level. I'll go back to our smaller entries and Martingale scaling. That seems to work quite well for these 1HTE setups.
​Here's a look at the day for me:

Let's take a look at this "new" market and see if it's really new or more of the same old stuff.
​Our technicals on the 5hr. chart have turned bullish. No surprise there.

But on the weekly we are still bearish. Just slightly but bearish, none the less. Remember...one day doesn't usually mean much.

Let's take a look at the daily chart agian to hone in on a couple key levels. The red line (5569) would be the level I'm watching closely. If we can recapture that then I think we can start to talk bullish markets and setups. Right now we are back to a key support level we established in Sept. of last year. As I mentioned above, we've tried several times this month to break above it and haven't succeeded. Until we do it's hard for me to get too bullish.

It's so hard to express a bias or lean currently. In a "best case" scenario it's always a guess. It may be an educated guess, but a guess, none the less. You need to form one otherwise how to you trade? Still...right now we are completely driven by news catalysts. The problem with that is we don't know when they will apprear. We love trading the dreaded FOMC days because we know its coming and when!  Right now it feels like we are walking in a mine field, just waiting for an unexploded mine to go off. We don't know when or where it is. Never the less, I'm going to put my money where my mouth is and day we are either flat of retace a bit today.  I will be waiting a few hours this morning before starting our day trades. I don't think this is a day you want to rush in. Also...keep in mind, when I say flat to down I'm using the current  500+ point surge level on /NQ as the starting point. Obvioulsy it looks like we'll open very bullish.

June S&P 500 E-Mini futures (ESM25) are up +2.01%, and June Nasdaq 100 E-Mini futures (NQM25) are up +2.51% this morning, extending yesterday’s rally as sentiment got a boost after the Trump administration’s move to alleviate some of the tensions unsettling investors.
Investors found relief after U.S. President Donald Trump said he doesn’t plan to fire Federal Reserve Chair Jerome Powell. Also, hopes for easing U.S.-China trade tensions further boosted risk appetite. President Trump told reporters on Tuesday that U.S. tariffs of 145% on Chinese goods will be reduced “substantially” if the two sides can reach a deal. “We’re going to be very nice and they’re going to be very nice, and we’ll see what happens,” Trump said. 
Futures linked to the tech-heavy Nasdaq 100 outperformed as Tesla (TSLA) climbed over +6% in pre-market trading, even after the EV maker reported disappointing Q1 results, as CEO Elon Musk said he would “significantly” scale back his involvement in the Department of Government Efficiency.
Investors now gear up for U.S. business activity data and the next round of corporate earnings reports. 
In yesterday’s trading session, Wall Street’s main stock indexes ended in the green. Equifax (EFX) surged more than +13% and was the top percentage gainer on the S&P 500 after the company reported stronger-than-expected Q1 results and provided solid Q2 guidance. Also, the Magnificent Seven stocks advanced, with Tesla (TSLA) rising over +4% and Amazon.com (AMZN) gaining more than +3%. In addition, 3M Company (MMM) climbed over +8% and was the top percentage gainer on the Dow after the industrial conglomerate posted better-than-expected Q1 results and reaffirmed its FY25 adjusted EPS guidance. On the bearish side, Northrop Grumman (NOC) plunged more than -12% and was the top percentage loser on the S&P 500 after the aerospace and defense company cut its FY25 adjusted EPS guidance.
Economic data released on Tuesday showed that the U.S. Richmond Fed manufacturing index fell to a 5-month low of -13 in April, weaker than expectations of -6.
Minneapolis Fed President Neel Kashkari said on Tuesday that the uncertainty surrounding Trump’s tariff policy could lead to an economic pullback and a potential recession if no resolution is reached. “The last two months have been the sharpest reduction of confidence in the ten years I’ve been at the Fed, except for March 2020 when Covid hit,” Kashakri said. He also emphasized that the independence of the Fed’s monetary policy is fundamental and crucial to achieving better economic outcomes. Separately, Fed Governor Adriana Kugler stated that tariffs are likely to exert upward pressure on prices and have a bigger economic impact than initially anticipated.
Meanwhile, U.S. rate futures have priced in a 92.6% chance of no rate change and a 7.4% chance of a 25 basis point rate cut at the conclusion of the Fed’s May meeting.
First-quarter corporate earnings season rolls on, with investors awaiting new reports from notable companies today, including Philip Morris (PM), IBM (IBM), AT&T (T), ServiceNow (NOW), Texas Instruments (TXN), and Boeing (BA). 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 focused on the U.S. S&P Global Manufacturing PMI preliminary reading, which is set to be released in a couple of hours. Economists, on average, forecast that the April Manufacturing PMI will come in at 49.0, compared to last month’s value of 50.2.
Investors will also focus on the U.S. S&P Global Services PMI, which stood at 54.4 in March. Economists expect the preliminary April figure to be 52.8.
U.S. New Home Sales data will be reported today. Economists foresee this figure coming in at 684K in March, compared to 676K in February.
U.S. Crude Oil Inventories data will be released today as well. Economists expect this figure to be 1.600M, compared to last week’s value of 0.515M.
In addition, market participants will be looking toward speeches from Chicago Fed President Austan Goolsbee and Fed Governor Christopher Waller.
Later today, the Fed will release its Beige Book survey of regional business contacts, 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. The report is published two weeks before each meeting of the policy-setting Federal Open Market Committee.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.341%, down -1.09%.

​Docket
09:45 ET
US S&P Manufacturing PMI Flash Forecast 49, Previous 50.2 Range 50 / 48
US S&P Services PMI Flash Forecast 52.6, Previous 54.4 Range 54 / 51
US S&P Composite PMI Flash Forecast 52, Previous 53.5 Range 54.6 / 51.5
10:00 ET
US New Home Sales – Units Forecast 0.685M, Previous 0.676M Range 0.709M / 0.65M
10:30 ET
EIA Crude Oil Inventories Forecast 1.55M, Previous 0.515M Range 4M / -0.4M
EIA Distillate Inventories Forecast -0.65M, Previous -1.851M Range 1.5M / -2M
EIA Gasoline Inventories Forecast -1.4M, Previous -1.958M Range 0.5M / -3M
14:00 ET
Fed’s Beige Book
Speakers & Events
09:00 ET
Fed’s Goolsbee Speaks. Opening remarks at Economic Stability Summit. Text and Q&A TBD
09:30 ET
Fed’s Musalem Speaks. Opening remarks at Fed Listens event. Text and Q&A TBD
09:35 ET
Fed’s Waller Speaks. Opening remarks at Fed Listens event. Text expected. No Q&A
12:00 ET
ECB’s Knot speaks at PIIE
13:15 ET
BoE’s Gov. Bailey Speaks at Institute of International Finance. No text. Q&A expected
14:00 ET
BoE’s Breeden Speaks at IMF on Monetary Policy and Financial Stability In Inflationary Times. No text. Q&A expected

Trade docket for today: It looks like we'll get a take profit early on our ISRG earnings trade. We'll try to get an IBM and MRK earnings setup on today. We delayed our GLD/SLV pairs trade yesterday. We'll start the today. I think we can get both a SPX and NDX 0DTE on today but I'll be patient on entries. No real benefit on rushing in today. Simple credit spreads may be all we need today, if we can time them right. We've waited patiently for our next Nat gas trade. Today is really the day to do it. We'll look at it. I'd like it to be around 5K in buying power and right now it's looking closer to 8,5K. We'll talk about it in our zoom session.

Let's take a look at the intra-day charts and see if we can find some key levels to trade off today.
​It's always a bit tough when you have this big of a move pre-market but I think we've got a couple good levels to look at today. 5474 is the key level for me to start the day. This is the first resistance level for us today. It's also the approx. level that has been rejected all  month. Every time we get there we retrace. If this really is a bullish switch then the bulls will want to get above and hold that level. Turning 5474 from resistance to support would be big. 5558 would be the next target for bulls. 5356 is first support with 5297 next. These are really wide levels, as you could expect, with the pre-market move we've had. We'll try to refine these more as the day progresses.

/NQ: We've got a similar pattern to the /ES. 19,151 is the next resistance. It correlates with the highs of the month and has been heavy resistance. My eyes are on 18,787. Bears will need to get back below that to get any meaningful retrace today.

BTC: Bitcoin has had a major decoupling from both the dollar and equities. The push up has been big and fast.
If we can clear 94,784 there's no  reason to think we can't continue pushing higher. Support looks like 89,703. 

I look forward to seeing you all in the live trading room. Today looks chock full of potential. It's on us now to find the right entries. Premium should be good enough that simple credit spreads could do the job for us today. Let's be patient. I'll probaly wait until our zoom session starts to look at entries. See you all soon!