Market Insights: Wednesday, March 26th, 2025
Market Overview
Stocks snapped a three-day win streak Wednesday as investor optimism faltered under the weight of renewed tariff threats from the White House. The Nasdaq led losses, sliding more than 2% as President Trump prepared to unveil fresh tariffs on auto imports. Tech stocks, especially Tesla and Nvidia, bore the brunt of the selling pressure. The S&P 500 fell over 1.1%, while the Dow lost around 0.4%. Markets reacted sharply after the White House confirmed Trump would host a press conference to discuss the new auto duties, which specifically targeted U.S. auto imports—putting further pressure on the sector. Ford and GM also dropped on the news. Earlier optimism around potential flexibility in Trump’s tariff plans quickly faded after he told Newsmax he didn’t “want to have too many exceptions,” signaling a pivot back to a harder line. These comments intensified fears of trade friction, particularly with Canada and the EU. On another front, the administration is reportedly accelerating plans for copper import tariffs, sending copper prices to a record high. In corporate news, GameStop soared over 11% after announcing it would purchase Bitcoin with excess cash—adding a jolt of speculative excitement to an otherwise risk-off session. Meanwhile, durable goods orders surprised to the upside in February, rising 0.9% versus an expected drop. But the data wasn’t strong enough to overcome geopolitical nerves, and traders sold stocks into the close.
SPY Performance
SPY ended the day down 1.19%, closing at $568.59 after opening at $575.40. It traded as high as $576.32 early in the session but then slid sharply to a low of $567.19 before finding modest footing. Volume ticked up to 45.25 million shares, slightly under average but heavier than Tuesday’s low print. The reversal snapped SPY’s three-day rally and pushed it back below its 200-day moving average, signaling that the bulls may be losing their grip ahead of Thursday’s economic data. Wednesday’s decline confirmed that traders are on edge heading into the April 2nd tariff deadline.
Major Indices Performance
The Nasdaq led the way lower with a steep 2.04% drop, as mega-cap tech names tumbled amid escalating trade tensions. The Russell 2000 followed with a 1.02% decline, while the S&P 500 gave up 1.19%. The Dow held up relatively well, slipping just 0.31%, supported by a few defensive names. Sector-wise, tech and discretionary stocks underperformed, while energy and consumer staples held firmer ground. Sentiment was sharply risk-off, as traders rotated out of high-beta names and braced for possible market-moving headlines in the days ahead. The broad pullback erased recent gains and left investors reassessing the durability of the current rally.
Notable Stock Movements
The Magnificent Seven were hit hard, led by a 5.74% drop in Nvidia and a 5.6% plunge in Tesla—both among the worst performers in the S&P. Alphabet, Meta, Amazon, and Netflix each lost over 2% as tech bore the brunt of the tariff anxiety. Microsoft and Apple were relatively more resilient but still slipped just over 1% each. The uniform selloff across big tech names underscored broad concerns about valuation and policy uncertainty, especially in a rising interest rate environment. The sharp drawdowns reflected a flight from growth and momentum stocks, with little appetite for dip buying in Wednesday’s session.
Commodity and Cryptocurrency Updates
Crude oil fell 0.36% to $69.69 as global growth concerns and weaker risk appetite weighed on energy markets. Our model still sees a path toward $60 unless a new supply shock emerges. Gold was nearly flat, dipping 0.05% to $3,054, showing muted reaction despite rising geopolitical risk. Meanwhile, Bitcoin slipped 0.76% to close just above $86,800. Despite the dip, it remains well above our long entry zone between $83,000 and $77,000. We continue to view Bitcoin favorably for tactical long trades, with profit-taking encouraged above the $85,000 level.
Treasury Yield Information
The 10-year Treasury yield dipped again by 0.35%, closing at 4.318%. The move came as investors sought safety during Wednesday’s tariff-driven selloff. While yields remain far from danger territory, any push back above 4.5% could threaten equity sentiment. For now, the slight dip in yields is consistent with a modest flight to safety, though the bond market is flashing concern over looming policy uncertainty. If the April 2nd tariffs land hard, yields could drop further as investors brace for slower global growth.
Previous Day’s Forecast Analysis
Tuesday’s forecast suggested a bullish bias for SPY with a projected trading range of $570 to $580. The model favored long setups above $572, targeting $578 and $580, while warning that a break below $572 could lead to a test of $570 or $568. Traders were advised to avoid short setups unless SPY lost support. The VIX at 17.15 supported a relatively calm session with choppy, controlled moves likely. Tuesday’s outlook leaned, reflecting a belief that consolidation near the highs could lead to a fresh push upward if $572 support held firm.
Market Performance vs. Forecast
Wednesday’s action sharply diverged from the bullish script on news of auto tariffs. SPY broke below the $572 support level early in the session and never recovered, plunging to a low of $567.19 before closing at $568.59—well below the forecasted range and beneath the 200-day moving average. The projected bias level of $572 was shattered early, triggering a technical breakdown that brought downside targets of $570 and $568 into play, both of which were hit. The session’s reversal validated the importance of those key levels, but the weakness went beyond expectations as tariff headlines accelerated the selling. Traders who reacted to the break below $572 had multiple short trade opportunities, especially with follow-through below $570. The price action served as a reminder that external catalysts like tariffs can quickly override setups. Despite the failed bullish outcome, the forecast did flag $572 as a key pivot, which once lost, opened the door to deeper losses.
Premarket Analysis Summary
In Wednesday’s premarket analysis, posted at 8:06 AM ET, SPY was trading at $575.54 with a bias leaning bullish. The model identified $576 as the key level to watch, suggesting long trades above it with targets at $577.50, $580, and $582. On the downside, support was found at $574 and $573, with $570 noted as the likely low if weakness emerged. The plan favored long entries near support, while allowing for tactical shorts if price rejected $576 and broke below $573. The overall tone was cautiously optimistic, with the model expecting a move higher if key levels held.
Validation of the Analysis
Wednesday’s session began near the $575 level but failed to hold, rejecting $576 early and quickly sliding below $574 and $573—confirming the premarket scenario for weakness. Once the $573 support failed, SPY fell swiftly to test $570, then continued to break down further to $567.19. The premarket analysis provided a precise roadmap for what would unfold in a bearish case, and traders who followed that guidance had clear short setups once $576 and $573 were rejected. The analysis warned that failing to reclaim $576 could lead to a downside break, and that scenario played out with textbook accuracy. For traders watching those levels, the premarket plan again proved to be a reliable edge in navigating the day’s volatility.
Looking Ahead
Thursday brings fresh macro catalysts with GDP and Unemployment claims on deck. These reports could be market-moving, particularly after Wednesday’s tariff-fueled reversal. Investors will be watching closely to see if economic data can counterbalance trade policy concerns. Friday’s PCE report remains the key event of the week and could set the tone for Q2. If inflation cools or growth holds steady, equities may stabilize. Until then, traders should stay alert for tariff updates and prepare for elevated volatility tied to macro headlines.
Market Sentiment and Key Levels
SPY closed at $568.59, well below the 200-day moving average and beneath major support levels. Sentiment has turned more cautious with the price now sitting near the lower end of its recent range. Resistance is now stacked at $573, $576, and $578. Support lies at $566, $563, and $560, with little cushion below that. If SPY holds above $565, bulls may attempt to regain control and push back toward the $573 level. A break above $573 could reopen the path to $578 and $580. However, if $565 fails, the door opens to a more aggressive selloff toward $560 and potentially $558. Momentum clearly favors the bears for now, but a reversal remains possible if economic data surprises to the upside or tariff fears cool.
Expected Price Action
Our AI model projects a wide trading range between $563 and $573 for Thursday, with a bearish bias. This broader range suggests increased volatility and potential trending behavior. As long as SPY trades below $573, the bears remain in control and short trades are favored. A drop below $565 would likely invite more selling pressure, with $560 and $558 as next targets. On the flip side, if bulls manage to reclaim $573, we could see a push back to $576, and potentially a move toward $580. This is actionable intelligence: Thursday’s direction hinges on economic data and tariff updates, and traders should watch closely how SPY behaves around $565 and $573. These levels will determine whether the market continues lower or attempts a rebound.
Trading Strategy
For Thursday, short trades are favored below $573, especially if SPY fails to reclaim that level early in the session. Look for short entries near $570 with downside targets at $566, $563, and $560. If SPY holds above $565 and starts moving higher, traders may consider long trades with tight stops, targeting a bounce to $573 and possibly $576. But caution is warranted. The VIX has ticked up following Wednesday’s drop, signaling a shift toward higher volatility. When volatility rises, risk increases—so position sizes should be smaller and stops wider. Keep a close eye on economic releases and unexpected news flow. Trending conditions are likely, and trades near support and resistance offer the best risk-reward. This is not a market to chase moves; wait for price to test key levels and look for failed breakouts or breakdowns to guide entry. Risk management is essential in this environment, and staying nimble is critical.
Model’s Projected Range
Our model projects a maximum range of $560 to $575 for Thursday—much wider than earlier in the week, indicating potential for strong directional moves. The market is currently Put-dominated, reflecting a bearish tilt. SPY remains inside a broad bear trend channel that’s been in place since December. With SPY now trading below the 200-day moving average and key support levels, downside risk is elevated. Resistance remains strong at $573 and $576, while support is found at $566, $563, and $560. If price holds above $565, a move toward $573 is possible. But if $565 breaks, traders should be prepared for a drop toward $560 or lower. External catalysts like GDP or PCE data could swing the market sharply, so it’s critical to track these levels closely.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI is currently in a Bearish Trending Market State, with price closing mid-range. There are no extended targets printing below. The range is narrow indicating a weakening bear trend. Overnight price traded at MSI resistance in a bullish state at $575.90 until the market open when the news of 25% auto tariffs caused the market to fall. The MSI rescaled lower several times and in rapid succession until 2 pm. With extended targets below for most of the decline, the herd participated in today’s market rout. By 2 pm, extended targets stopped printing and price attempted to rally slightly into the close. MSI support is currently $568.01 with resistance at $569.98.
Key Levels and Market Movements:
We stated Tuesday, “it is a tariff week so we advise staying tuned for news out of the White House”. We also stated, “Below $572 the bears will attempt to move prices lower.” And finally we stated, “Below $572 and we are keen on short set ups.” With our plan in hand, at the open and with price already testing and failing to break MSI resistance at $575.90, without any extended targets above and a textbook failed breakout, we were short at $575.75 looking for a first target at MSI support at $572.50. Immediately after our short, news of 25% auto tariffs broke and price fell quickly with the MSI rescaling to a bearish state from a bullish state. We took first profit at $572.50 and held our 30% runner for lower prices given extended targets began printing below price. While the MSI range was narrow, with extended targets below, we were confident the herd was piling into our short. Price bounced around for a couple of hours without much movement either way so we waited for a break of $572 to reload our short believing price would fall to $570 at a minimum. By noon the MSI rescaled lower again and with extended targets and a widening MSI range, we reloaded our short to full size at $572 and took a first target at MSI support at $570.65. Once again, extended targets had us hold our runners for lower levels with our stop at $572. And sure enough by 1 pm price fell and we felt confident price would continue to move lower. But with price below our models near term levels and only $565 as a possible target, as extended targets started printing more sporadically, we took a second target of 20% of our position at MSI support at $568.30 and on a less than perfect failed breakdown at 2 pm, we exited our final 10% just a tad lower. This single trade turned into two trades as we followed our plan to the letter. And because the premarket had identified a break of $573 as a bearish trigger coinciding with the post market report, we went in heavier than normal, turning today’s profits into a hugely successful day. Once day like this is the equivalent of four or five days of “normal” trading. Another two for two day but with enough profit for a week, made possible by planning the day, sticking to the plan, and using the MSI and our model to guide us. The MSI displays who controls the market, when and where they took control while providing levels of support and resistance for exits. When we combine the MSI with our model’s levels and our daily trading plan, we almost always end the day in the green. The MSI does this every single day, day in and day out keeping users out of trouble with actionable information to ensure traders stay on the right side of the market, trading with the trend, while providing levels to take profits. We highly recommend incorporating the MSI into your trading arsenal, combining it with our trading plan, to maximize your long-term success.
Trading Strategy Based on MSI:
Thursday brings GDP and Unemployment Claims, but we’re not expecting much market-moving impact from either. Tariffs remain the bigger driver, and we continue to emphasize staying tuned for any news out of the White House—every tariff headline is effectively a PCE or FOMC announcement in disguise, capable of moving SPY $10 or more. Absent any fresh catalyst, our model is forecasting a minor relief rally overnight as the market awaits further developments. Given the current state of the MSI, it’s likely that rallies will be sold as long as price remains below $573. A move above $573 would put the bulls back in play, targeting $575. Below $573, the bears maintain the edge—and if additional negative tariff news drops, a test of $565 becomes highly probable. Should $565 break, the bears will decisively take control and push prices lower. Our general lean for Thursday: a modest overnight drift higher, followed by selling pressure unless $573 is reclaimed. We continue to favor two-way trading. If SPY can hold above $565, the bulls may attempt to regain control and push toward $573. A break above $573 reopens the path to higher levels. However, if $565 fails to hold, the door opens for a move down to $560 and $558, where the bears will likely press harder to force a breakdown below $550. Holding $565 is crucial for the bulls—losing it hands firm control back to the bears. We’ve been flagging the risk of a negative reaction to tariffs this week, and our outlook hasn’t changed: if the market can absorb the April 2nd risk without breaking recent lows, we still expect a bullish drift higher into the end of Q2. As always, failed breakouts and breakdowns at major levels remain our best setups in this two-way environment. Watch the MSI closely—it offers essential clues. Avoid fighting extended targets, as they often signal strong participation from the herd in either direction. Use the MSI to stay on the right side of momentum—it’s a critical component of trading success. If you’re not yet using our model levels alongside the MSI, we strongly recommend reaching out to your representative to get access. This tool dramatically improves your odds by helping you align with the market’s controlling forces.
Dealer Positioning Analysis
Summary of Current Dealer Positioning:
Dealers are selling $576 to $584 and higher strike Calls while buying $569 to $575 Calls. This indicates the Dealers’ desire to participate in any short squeeze, relief rally on Thursday. Dealers nailed their positioning for today believing “price may stagnate at the current levels”. To the downside Dealers are buying $568 to $550 and lower strike Puts in a 1:1 ratio to the Calls they are buying/selling, implying a neutral to slightly bullish posture for Thursday. This positioning has changed from slightly bearish to neutral.
Looking Ahead to Friday:
Dealers are selling $576 to $590 and higher strike Calls while buying $569 to $575 Calls indicating the Dealers desire to participate in any relief rally into Friday to as high as $580. It certainly appears that Dealer have a ceiling at this level for this week. To the downside, Dealers are buying $568 to $525 and lower strike Puts in a 2:1 ratio to the Calls they are selling/buying, reflecting a neutral view for the rest of the week. Dealer positioning has changed from slightly bearish to neutral. Dealers are prepared for tariffs but seem to be showing us that price may find a support in the current range this week. Our model sees prices in April moving higher but also sees a 20% correction on the horizon near the end of Q2 as the results of the administration’s economic policies begin to be felt by businesses across the globe. We advise reviewing Dealer positioning daily for clues to the market’s direction given Dealer positioning changes and it’s essential to monitor these updates for shifts in sentiment.
Recommendation for Traders
The market was moved today by tariff talk, breaking its three-day win streak. Losing the 200-day moving average (DMA) makes it even more difficult to reclaim that level. The market will now require either time to build energy within a fairly tight range or an external catalyst to push prices meaningfully higher or lower. As we said yesterday: “Unless an external catalyst derails the current three-day rally, the breakout will be higher to $585.” Well, we certainly got the catalyst. So while our advice remains similar to yesterday’s, the change lies in who’s currently in control: be flexible—when an unexpected catalyst hits, trade what’s in front of you. We still favor two-way trading, but we’re no longer leaning bullish until $573 is reclaimed. Sell rallies, but also consider longs from major support. The bulls lost their slight edge today, so the edge now shifts—slightly—to the bears. We're talking more of a 60/40 tilt, not a dominant mandate. Price may continue to chop around the 200 DMA as it builds energy for a decisive move. If $565 breaks, a move toward $550 becomes likely. In this environment, we recommend focusing on failed breakout or breakdown setups at key levels—these offer the best risk/reward, especially when confirmed by non-extended MSI readings. Counter-trend trades should only be considered when price is testing a key level and supporting conditions align. Stay nimble and disciplined. The bears may have control for now, but that could shift quickly. Focus on trading from the edges, where risk is defined and odds improve. As always, review our premarket analysis before 9:00 AM ET for the latest levels and signals.
Good luck and good trading!
