4/23/25 Recap

The SPY gapped up over the 21 ema and so far has rejected the downtrend perfectly, this trade war is starting to become impossible to navigate. We need to see a break over that trend line before we can discuss a sustained period of equities rising. If we could close over the 21 ema later today that would be a big first step, we have not done that in weeks and have done it only once since this downturn began, that level is 538.01 on the SPY. Like I mentioned in yesterday’s recap you could feel the appetite for risk growing with all those biotech put sales yesterday and sure enough we got that pop right away. Today was the opposite the option flow was a bit muted making me think nobody is really too bullish after that little move up. My opinion here is we failed a downtrend break, this isn’t time to be a hero, stick to whatever plan you had over the weekend, lighten up some and once we break that downtrend, press hard.

Yesterday morning Bessent had his closed door meeting at the JP Morgan conference where he told everyone the trade war couldn’t continue on its trajectory(so much for the time for main street nonsense he spewed recently) and then yesterday afternoon Trump sounded like he caved on multiple things. He said he wasn’t looking to fire Powell anymore and he said tariffs on China would not be 145% but they would be more than zero. The good news here is this is the 3rd time in 3 weeks where markets went down enough to make Trump make concessions. So he is 100% watching markets and he panics and folds to a degree when they get ugly enough, that to me says markets are his top priority regardless of what anyone says. Today the Wall Street Journal is reporting they would be in the 50-65% range. Still, no official word from the people in charge. Moments ago Bessent said a trade deal with China could take 2-3 years and we are still waiting to speak with them. So the huge pump in the megacaps is reversing right now and it is uncanny how this all happened right at the downtrend line above.

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