Market Insights: Monday, March 31st, 2025
Market Overview
Stocks staged a late-session comeback on Monday, helping Wall Street limp into the end of a brutal quarter. After opening in the red, the Dow Jones Industrial Average reversed course and surged more than 400 points, or 1%, to lead the major indices higher. The S&P 500 erased early losses of nearly 2% to close up 0.6%, while the Nasdaq lagged behind, ending fractionally lower with a 0.1% dip. Monday’s rally was powered by dip-buying after a month dominated by recession fears, inflation concerns, and mounting anxiety over President Trump’s looming tariff blitz. March capped off one of the worst quarters for markets since 2022, with the S&P down over 4.5% year-to-date and the Nasdaq sliding more than 10%. Tech has been hit the hardest, as Nvidia flirts with bear market territory, down nearly 20% on the year, while Tesla has plunged over 35%. Uncertainty surrounding the scope of Wednesday’s so-called “Liberation Day” tariffs continues to keep risk appetite suppressed. Trump has indicated the tariffs will be sweeping and global, shattering hopes for a more targeted approach. A weekend Washington Post report revealed the President is pushing advisors to go even bigger with the levies. Meanwhile, economic worries still loom large after last week’s hotter-than-expected core PCE print. All eyes now turn to Friday’s jobs report—the week’s most anticipated data release—as markets brace for another wave of volatility.
SPY Performance
SPY rebounded 0.67% on Monday to close at $559.39, up from an open of $549.83. After an early plunge to a low of $546.87, the ETF surged nearly 13 points intraday to hit a session high of $560.71 before settling just beneath it. Volume came in strong at 74.93 million shares, well above average, reflecting heightened activity as traders rebalanced into quarter-end. The reversal was fueled by a failed breakdown below the March 13th low of $549, triggering a sharp intraday short squeeze. While SPY remains below its 200-day moving average, the bullish reversal off the lows may force bears to reassess in the short term.
Major Indices Performance
The Dow led Monday’s charge, rising 1.00% as cyclicals and financials powered the index to a 400-point gain. The S&P 500 followed with a 0.6% advance, recovering from steep losses earlier in the session. The Nasdaq finished slightly lower, down 0.14%, weighed by continued selling in mega-cap tech stocks. The Russell 2000 underperformed with a 0.48% drop, extending its relative weakness. Sector-wise, defensive plays like utilities and healthcare held steady, while energy rallied alongside oil. Monday’s turnaround was less about conviction and more about positioning as quarter-end dynamics played out. Despite the rebound, market sentiment remains cautious heading into a data-heavy week and the long-anticipated April 2nd tariffs.
Notable Stock Movements
It was a mixed session for the Magnificent Seven, but the tone was still cautious. Tesla, Amazon, and Nvidia led the downside, each falling over 1% as continued pressure in growth stocks weighed heavily on the group. Microsoft, Netflix, and Alphabet slipped modestly, while Apple and Alphabet bucked the trend, finishing slightly green. With Nvidia nearing a 20% year-to-date decline and Tesla already off more than 35%, the group’s leadership is in question. The synchronized weakness reflects broader macro fears, particularly over tariffs and inflation, leaving Big Tech without a clear catalyst heading into Q2.
Commodity and Cryptocurrency Updates
Crude oil jumped 2.91% to $71.38, bouncing on renewed tariff tensions and reports of fresh Iran sanctions. Despite Monday’s spike, our model still expects oil to trend toward $60 barring a major supply disruption. Gold extended its safe-haven rally, climbing 1.38% to $3,157 as investors hedge against mounting macro uncertainty. Bitcoin inched up 0.35% to close above $82,500, holding within our long-only trading zone of $77,000 to $83,000. While momentum in crypto remains subdued, we remain buyers in this range, targeting profits above $85,000.
Treasury Yield Information
The 10-year Treasury yield declined 1.03% to close at 4.211%, reflecting continued flight-to-safety flows amid elevated economic uncertainty and risk-off sentiment. Yields have now pulled back sharply from the 4.5% danger zone, offering some breathing room for equities. However, traders should remain alert: any reversal back toward 4.5% could reignite equity selling. For now, yields remain supportive, but the margin for error is slim given the week’s heavy data slate and looming tariff fallout.
Previous Day’s Forecast Analysis
Monday’s forecast projected a wide trading range between $547 and $568, citing bearish control below $565 and actionable downside targets at $555, $550, and $547. A break below $549 was expected to trigger further selling into the $540s, while reclaiming $558 would shift momentum back toward $562 and $568. The model warned that unless bulls reclaimed $560 quickly, the path of least resistance remained lower. Short setups were favored below $565, while tactical longs were advised only above key support. With high volatility expected, traders were urged to stay nimble and avoid overexposure ahead of major economic catalysts.
Market Performance vs. Forecast
SPY's price action closely followed the script laid out in the forecast. The ETF opened at $549.83 and quickly dipped to $546.87—just below the March 13th low—before snapping back in a powerful intraday reversal. The model’s lower bound of $547 was tested and briefly breached, triggering a textbook failed breakdown that reversed sentiment sharply. SPY rallied as high as $560.71 before closing at $559.39, nearly tagging the $562 upside target. The short setups below $555 paid early, but those who flipped long on the breakdown failure saw even bigger rewards. The model’s emphasis on $555 and $549 as key pivot points was critical for navigating Monday’s volatile session.
Premarket Analysis Summary
In Monday’s premarket analysis posted at 7:26 AM, SPY was trading at $550.02 with the bias level identified at $550. The outlook leaned bearish heading into the week, citing mounting macro risks including tariffs, PMI, Powell’s speech, and the upcoming jobs data. Key targets were laid out clearly: below $550, SPY was expected to test $547 and $545, while holding $550 could produce a rally to $555 or $557. The model also flagged the potential for brief but aggressive rallies in this volatile backdrop, advising early profit-taking and close attention to key levels throughout the day.
Validation of the Analysis
Monday’s price action validated the premarket analysis with impressive accuracy. SPY initially broke below the $550 bias level, falling to $546.87 before staging a swift reversal. The test of $547 matched the downside target, while the subsequent rally tagged the upper target near $560. Traders who followed the plan and entered long near $547, or flipped long on the breakdown failure, had ample opportunity for profits. The alert to expect fast rallies amid bearish pressure proved essential, as the failed breakdown below the March 13th low sparked a high-velocity squeeze. Once again, the premarket roadmap offered a precise and actionable framework.
Looking Ahead
Tuesday brings a trio of key data points: PMI, ISM, and JOLTS job openings. These releases could inject fresh volatility, especially after Friday’s PCE report rattled inflation expectations. With the tariff implementation looming Wednesday, sentiment remains fragile, and any sign of economic softening could spark additional selling. Traders should be prepared for wide swings around the data drops and remain focused on the broader narrative driving markets this week: tariffs, inflation, and a slowing economy.
Market Sentiment and Key Levels
SPY is currently trading near $559, firmly below its 200-day moving average and still inside the broader bear trend channel. Sentiment remains bearish, but Monday’s failed breakdown at $549 has opened the door for a short-term bounce. Key resistance levels to watch are $561, $565, and $567. Support sits at $555, $553, and $550. A break above $561 could set the stage for a push to $565, while a failure to hold $555 would put $550 and $547 back in play. The bears still control the broader tape, but the bulls have a short-term opening if they can build on Monday’s reversal.
Expected Price Action
Our AI model projects a wide trading range of $548 to $565 for Tuesday, implying another session of potential trend moves and headline-driven volatility. That said, the market may stall and chop in a tight range the close we get to the release of the April 2nd tariffs. The market leans bearish below $565, with downside targets at $555, $553, and $550. If SPY loses $550 again, $547, and $545 come into focus quickly. On the flip side, if bulls can reclaim and hold above $561, the tape opens up toward $565 and $567. This is actionable intelligence: bears remain in charge unless $565 is recaptured. With macro catalysts coming fast this week, traders should expect sharp swings and stay ready to adapt as the narrative evolves.
Trading Strategy
Traders should look for short entries near resistance at $561 and $565, targeting downside moves to $555, $553, and $550. If SPY breaks below $550, shorts can extend toward $547 and $545. Conversely, tactical longs are in play if $555 holds early and SPY pushes through $561—then targets shift to $565 and $567. The VIX remains elevated, reflecting the high-risk environment. In this kind of market, trade smaller, use wider stops, and focus on price action near key levels. Failed breakouts or breakdowns remain the highest-probability setups. With tariff uncertainty peaking and multiple data drops ahead, traders should stay nimble and alert.
Model’s Projected Range
Our model projects a maximum trading range of $547.50 to $567 for Tuesday. This is a wide range, suggesting we’re likely to see trend-driven price action, but with periods of chop. The market remains Put-dominated, reinforcing the bearish tone. Support below $550 remains limited, heightening the risk of a move toward $545 or lower. On the upside, resistance emerges above $567, extending into the $570 range. SPY once again closed well below its 200-day moving average amid a selloff driven by inflation concerns and looming tariffs, with little relief offered throughout the session. The critical level for bulls to reclaim control remains $565—failure to do so keeps bears firmly in control of the broader market. The March 13th lows were briefly breached, setting up a textbook failed breakdown that saw a sharp reversal from the day’s lows into the close. While bears had targeted a breakdown toward $545, the intraday low of $546.87 fell just short, trapping aggressive shorts and sparking a short squeeze. As we noted previously, a break of the low was likely to push price to at least $547, which played out nearly to the tick. Looking ahead, the anticipation of April 2nd tariffs continues to act as the dominant market catalyst. As we've noted for several days, if markets can absorb these headwinds without breaking materially below $549, we anticipate a bullish drift higher—potentially extending into the end of Q2. However, if the March lows give way decisively, SPY could revisit levels not seen since August 2024. Price action remains confined within a broad bearish trend channel that began in December, which allows for movement in either direction but is expected to contain near-term volatility. For now, momentum remains in the hands of the bears.
Market State Indicator (MSI) Forecast
Current Market State Overview:
The MSI is currently in a Bullish Trending Market State, with price closing right at MSI resistance. There are no extended targets printing above. The MSI range is narrow indicating a weak bull trend. Overnight price continued to trade lower as the MSI rescaled lower in a wide bearish state. By the open price had reached the March 13th lows and just after the open, extended targets printed below, indicating the herd was participating in a push to the day’s lows. As quickly as the March 13th lows broke, the MSI stopped printing extended targets and price reversed back into the wide, MSI Bearish Trending Market State. By noon the MSI rescaled to a very narrow Bullish Trending Market State which contained price in a very narrow range. But by 2 pm the MSI began rescaling higher and printing extended targets which saw price move to the day’s highs. The bullish MSI range remained quite narrow but with extended targets, price was free to move toward major resistance at $560. Currently MSI resistance is $558.12 and support is at $555.90.
Key Levels and Market Movements:
We stated Friday, “It’s likely the bulls attempt a backtest of $558.” We also said, “If today’s lows at $555 don’t hold—the market is headed toward the March 13th lows at $549.” Finally, we noted, “Our model sees mild overnight weakness, likely retesting and breaking today’s lows at $555.” Straightforward and actionable intelligence—designed to help you build a plan for the day. With this plan in hand, with price already testing the March lows in the premarket and with no extended targets below with the MSI in a bearish state, we waited for an opportunity to go long from major support on a failed breakdown. SPY delivered a textbook failed breakdown before 10 a.m. We waited a bit to enter since the MSI was still printing extended targets below. But the second those stopped printing, we were long at 9:46 a.m. at $547.75, eyeing a first target at MSI support-turned-resistance at $550.06. Price reached this level quickly, and we moved our stop to breakeven—this was a countertrend trade, and we weren’t sure if prices would continue higher. Price did pull back slightly, but we held steady, with a second target at MSI resistance at $555. SPY touched this level around 1 p.m., so we took off another 20% of our position and left a runner to see how far price could go. From our plan, we knew if $555 held, the market would test $558. The MSI had shifted to a bullish state, and with price pulling back to $553.20, we decided to reload our long on a quadruple bottom, aiming to scalp just $1 to MSI resistance. We exited 70% of our position quickly, as the MSI rescaled higher in rapid succession with extended targets above. We took off another 20% at MSI resistance and the premarket level of $557, holding our final 10% runner for $558—our final target. We closed out on a failed breakout at 3:40 p.m. ET, banking solid profits on two countertrend trades. This is what happens when you harness the power of a solid trading plan, stick to it, and use the MSI and our model’s levels as your guide. The MSI shows us who controls the market, when and where they took control, and provides actionable support/resistance levels for precise entries and exits. When we combine the MSI with our model’s levels and our daily plan, we nearly always end the day in the green. The MSI delivers this level of precision daily—helping traders avoid trouble, stay on the right side of the market, and take profits with confidence. We strongly recommend incorporating the MSI into your trading arsenal. Paired with a solid plan, it can significantly boost your long-term success.
Trading Strategy Based on MSI:
Tuesday brings PMI and Jolts which could move the market slightly. But the big news is all related to the April 2nd tariffs on Wednesday. The market is on edge and while the bulls were able to make a strong showing today, it’s time to sit back and wait for more information before signaling the all clear. There is a fairly high probability, given the narrow MSI that SPY will retrace some of today’s rise, testing $555 once again. If this level holds, price may again attempt to move beyond $558 toward $565. SPY will run into interference above $560, but clearly $565 is the next major level the bulls need to reach to have any chance of taking control from the bears. Even with today’s rally, the bears are in complete control and rallies will be sold. If today’s $555 doesn’t hold—the market is headed to today’s lows at $547. A failure there and we visit the August lows. However, if the bulls can hold $555 and then push price back above $560, we’ll likely see a move toward $565 and higher. The White House is set to release broad new tariffs on April 2nd, and as such, every headline out of D.C. is effectively a PCE or FOMC print in disguise, with the power to swing SPY by $10 or more. Absent a fresh catalyst, our model sees mild overnight weakness, likely retesting $555. We expect the market to go into consolidation mode the closer we get to April 2nd. That could start mid or late tomorrow morning. As we said, the bears have full control of the market, and as such, our lean remains to sell all rallies until $565 is reclaimed. For tomorrow we are inclined to trade both directions given the odds of more choppy conditions are high. We’ll consider longs from $550 to $558 and shorts from $555 to $565. If the market can digest April 2nd without breaking today’s lows, our model still expects a bullish drift into the end of Q2. Keep a close eye on the MSI—it’s offering key signals. Avoid fighting extended targets; they often reflect strong herd participation. Use the MSI alongside our model levels to stay aligned with momentum. If you’re not already using these tools, reach out to your rep—they’re game changers in navigating this two-way environment.
Dealer Positioning Analysis
Summary of Current Dealer Positioning:
Dealers are selling $564 to $584 and higher strike Calls while buying $560 to $563 Calls. This indicates the Dealers’ desire to participate in any continuation of today’s rally on Tuesday. To the downside Dealers are buying $559 to $537 and lower strike Puts in a 1:1 ratio to the Calls they are buying/selling, implying a neutral to slightly bullish posture for Tuesday. This positioning has changed from neutral to slightly bullish.
Looking Ahead to Next Friday:
Dealers are selling $572 to $585 and higher strike Calls while buying $560 to $571 Calls indicating the Dealers desire to participate in any rally this week. There appears to be a ceiling to any optimism at $580. To the downside, Dealers are buying $558 to $530 and lower strike Puts in a 3:1 ratio to the Calls they are selling/buying, reflecting a bearish view for the week. Dealer positioning has changed from neutral/slightly bullish to bearish. Dealers have added significantly to their downside protection in case the April 2nd tariffs pressure the market to move toward the August lows. We continue to recommend long books do the same. The trend for the model is for financial conditions to worsen as the results of the administration’s economic policies begin to be felt by businesses across the globe. This guidance continues to resonate even with today’s rally. 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 had a good day but not a great day. Tech is still under pressure and today’s rally was uneven at best. The bulls have lost all control to the bears and even though the March 13th lows effectively held today, price had to get there in order to bounce. That favors more of the same…that rallies will be sold. This remains true until a catalyst shifts the broader outlook. Could that be the tariffs are not as bad as expected, or the Fed starting QE once again? Who knows. Keep an eye on major levels like $550 and $565. Below $550 the door opens for a deeper move—potentially toward $500. Above $565 and the bulls chip away at the bears control and SPY moves back toward $585. Short term, the market remains dangerous until we get clarity on the scope and impact of the new tariffs. Stay cautious: trade small, carry downside protection, and stay flexible. When unexpected catalysts hit, your edge comes from trading what’s in front of you. In this environment, we recommend focusing on failed breakout or failed breakdown setups at key levels. These typically offer the best risk/reward, especially when confirmed by the MSI. Counter-trend trades should only be considered when price is testing a critical level and broader conditions align. Stay nimble and disciplined. The bears may have the upper hand for now, but sentiment can shift quickly. Focus on trading from the edges, where risk is defined and probabilities improve. As always, review our premarket analysis before 9:00 AM ET for the latest levels and signals.
Good luck and good trading!
