S&P 500 Daily Update for Monday April 7, 2025

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Summary of the Daily Update for Friday, April 4th, 2025:
The stock market experienced a severe decline on Friday, April 4th, with the S&P dropping nearly 6% (5.97%), following a nearly 5% decline on Thursday, totaling an 11% loss over two days. This sharp downturn was primarily attributed to heightened fears over tariffs and a potential escalation of the trade war, exacerbated by China's retaliatory 34% tariff on U.S. imports, though the impact may be limited as China imports less from the U.S. compared to U.S. imports from China.
The S&P 500 opened with a significant gap lower, starting below the S2 pivot point at 5320, and continued to fall through multiple support levels (S3 at 5212, S4 at 5103), closing at the intraday low below 5100. This marked a rapid descent from the mid-February peak in the 6000s. Volume was well above average, reflecting widespread panic selling, with dip-buying attempts quickly overwhelmed by more selling pressure.
Sentiment is extremely negative, with short and intermediate-term trends firmly bearish. The long-term trend remains positive but is at risk as the market lingers below the 200-day moving average, potentially signaling a bearish crossover soon. The NASDAQ entered bear market territory, down more than 20% from its February peak, while the S&P is down 17.42% from its all-time high, nearing bear market status (20% decline).
Technical indicators showed extensive damage: The Smart Money Indicators are all negative, the VIX (fear gauge) surged to 45.31 (indicating high volatility), and numerous short- and intermediate-term metrics (e.g., RSI, ADX, stochastic) hit extreme negative levels, suggesting possible capitulation but not guaranteeing an immediate bottom. Interest rates dropped below 4% on the 10-year yield, reflecting a flight to safety into bonds, though they closed at 4.06%.
Economic data presented a mixed picture: the employment situation report showed solid job growth (228,000 vs. 130,000 expected), but prior months’ figures were revised downward, raising concerns. Fed Chair Powell acknowledged tariff-related headwinds but indicated the FOMC would wait for clarity before adjusting policy, downplaying immediate intervention.
Globally, markets weakened amid fears of a slowdown and escalating trade tensions, fostering a "risk-off" bias—shifting investments from stocks to bonds. Money flowed out of the market, rather than a rotation from growth to value observed since mid-February. Speculation arose that pre-election economic data might have been inflated, with post-election revisions painting a bleaker picture, though this remains unconfirmed.
Looking ahead to Monday, April 7th, the outlook remains negative in the short and intermediate term, with oversold conditions suggesting a potential slowdown in selling but no clear reversal. Key upcoming data includes Fed meeting minutes (Wednesday), CPI (Thursday), and PPI (Friday), alongside ongoing tariff developments. Seasonality offers mild positive potential, but the dominant bearish momentum and technical damage overshadow this for now.

PDF of Charts and Slides used in today's video:
https://drive.google.com/file/d/1Pspl2QABMEukhb0qcsRFVHa-Ay14NGPt/view?usp=sharing

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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!