4/13/25 The Week Ahead

Well, the market will likely be up big tomorrow. Go back and read the opening paragraph of Friday’s recap. Donald Trump did the one thing I mentioned in Friday’s recap that could save the market

The President caved to the pressures of the bond market and stock market yesterday morning as you can see below. You could feel this coming on friday afternoon with the way Apple was going up in a straight line closing up 4% after all the call buys and the lack of fear from people holding into the weekend. Another tell was the large number of gold puts being bought that I highlighted friday. Saturday morning after all the talk about how tough he would be on China, Donald Trump mostly gave up his fight. This for the most part concludes a 10 day period of downward pressure on equities. It also really sets a bad precedent going forward as China and the rest of the world now can see how reliant we are on stocks staying elevated to the point that a week of weakness and the President has to back off his original tariff plan. I’m sure Trump and his people will claim some victory but Trump raised tariffs on China 3 times, they retaliated every time and Donald said he was hoping Xi would call him on Thursday, Xi ignored him, then Trump said China was ready to make a deal and within 48 hours of that comment, Trump rolls back China tariffs on his own. In no world is that a win. Remember the original goal of the tariffs was to bring back jobs to America which would also pay down the debt they said. Now it all seems like the last 10 days were a complete joke with very few if any companies bringing back jobs on 10-20% reciprocal tariffs. Howard Lutnick was on tv a week ago clamoring how iPhones would be made in America and 5 million Americans with high school diplomas would have jobs screwing in things and being new age mechanics handling the robots coming. I’d imagine Lutnick or Navarro, possibly even both are kicked to the curb soon and become scapegoats for this failure. Amazing how this all happened right as the SPY death cross was taking hold friday. It’s almost like his advisors said this had to be done right now and couldn’t wait.

Just like the last big selloff we had in 2023 below, we closed under the 100 week 1 time and instantly bounced back. It’s funny because I always joke about how stocks only go up but the reality is our society is just so dependent on it that we always save them. Right now if Trump really played hardball as he promised, you saw the daily 4% moves down and stocks were not liking it at all. The President ran the risk of a prolonged market decline which would have led to bad consumer sentiment which would have meant a higher possibility of losing midterms next year with a likely impeachment on his end. Now he backs off and all is well in the world. It’s tough to make structural changes to our society where you basically have 2 years till the next key election and you can’t make tough moves that rattle markets for long. This time feels a little different, alot of foreign money has definitely left our market and will not return as we broke their trust, so maybe we rise some but multiples compress a little as the amount of money looking to invest in our markets may be smaller going forward? While we will pop on Monday, I don’t see new highs coming anytime soon as the uncertainty in our markets remains elevated going forward.

With all the above said, I can’t really write a best idea up this week because it appears likely we’re going to have a massive gap up so all the options pricing right now won’t matter monday morning. What you want to do now if that happens is target the gap fills on all the names you want to trade and sell puts there to profit or scale in. The 10 names I wrote up last Sunday are all quality names to target. Gaps fill most of the time and you do not want to chase the monday morning up higher. So make a list of names you want to play now that the great 10 day trade war of 2025 is over and sell puts at or below gaps and try to go long there.