3/21/25 Live Trading Room Market Recap & Trades
Ten Days Of Sideways
Congrats bulls! The S&P 500 closed at $5666.68, up 0.51% this week, officially ending a 4-week losing streak - but only a tad below where we opened two weeks ago. In the meantime, we made it through Fed Day. And with that, I’m still sticking with this pre-FOMC market call:
unless the Fed announced a “QT PAUSE” then market would most likely fill one intraday hourly gap on the upside before filling the other on the downside potentially by Friday… but next week more likely.
We looked headed there on the gap down Friday morning but OpEx pull was too strong with the resulting chop before Trump dropped one of his famous market-manipulating tape-bombs!
In the meantime, my warning to clients March 10th that VVIX & VIX would peak and IV would compress into OpEx was spot on - so was the call that market would be hard-pressed to get/close above 5670 monthly resistance. Once it does, we see 5783 in a hurry, but we need a macro trigger - like Trump saying on the eve of reciprical tariffs April 2nd: “I was just kidding.”
Otherwise, we need some natural or mechanical buyers to step in - and as of my latest Intermarket Review, I still don’t see real buyers. And regarding the latter, I have a whole separate post that deals with this important flow because data is not helpful to positioning without context.
The Week Ahead
Now that we are past the onslaught of major central bank rate decisions of the last week, we have one reporting that is of interest (forgive the pun) to my USDMXN swing short trade idea: Mexico’s central bank is expected to cut 50bp ahead of April 2nd recipricol tariffs by US. After which, I expect USDMXN to break 19.19 in coming weeks and 1.42 to break in USDCAD.
As for other data incoming…
Marc Chandler, Chief Market Strategist at Bannockburn Global Forex, summarizes the main data focus coming up:
“February personal consumption data, durable goods orders (and shipments) and March survey data (several regional Fed reports, Conference Board, and the preliminary PMI) are due and they will help Q1 GDP forecasts.
The Atlanta Fed's GDP tracker is still looking at a contraction, but it has been pared to -1.8%, but the lowest forecast in Bloomberg's survey (with 58 respondents) is for a 1.2% expansion.
The CPI and PPI take most of the guesswork away from forecasting the PCE deflator, which the Fed targets. The headline will be little changed at 2.5%, while the core rate ticks up to 2.7% from 2.6%.”
The take away is that higher yields from PCE could further support markets, but not enough to really make a difference given my continued theme of MONEY GOES HOME.
Ironic how ALL 58 ECONOMISTS surveyed by Bloomberg see economic growth - despite all the risks and the repeated warnings by Treasury Secretary Bessent that we are in a ‘detox’ period for equities and the economy.
Speaking of Bessent, I featured his recent All-In Podcast in #macro-to-micro-support channel is Slack with my assessment of what this means to have an administration with a clear agenda to BALANCE TRADE and FORCE DOMESTIC MANUFACTURING & CONSUMPTION.
TRADE UPDATES
BA Takes Flight & ACN Crashes On DOGE
Lucky or good, I spotted Boeing for clients a few days ago before it's big $25 ramp 😋
And Accenture was high conviction swing short before it fell 25%! 🔥