Market Context and Game Plan for April 1st, 2025
New Month, New Beginning?
As we begin the new month, the market undercut the previous day’s lows but managed to bounce back, indicating possible short-term strength after a brief retracement. However, as always, we must be cautious about whether this move is part of a larger continuation or a reversal. With economic data lined up today and this week, volatility could increase. We’ll use the data to either confirm a market trend or adjust our strategy accordingly.
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Key Levels to Watch:
SPY Levels:
Yesterday's High (560.7): This will be a key level to watch today. If the market holds above this level, we could see a continuation to the upside, with a potential test of 570. On the other hand, if the market fails to break above 560 and shows weakness here, we could see a rejection that leads to further downside pressure.
Yesterday's Low (548): If the market tests this level and fails to reclaim it, we could see further downside, possibly heading back toward 555, the next major support level.
Bullish Scenario (Above 560): If the market holds above 560, the next target would be 565, followed by a potential move to 570 if data supports positive momentum. We would look for confirmation of strength through strong buying momentum at these levels.
Bearish Scenario (Below 555): If the market fails to hold above 560 and breaks below, the next support comes in around 555 and further down to 550.
QQQ Levels:
Yesterday's High (469.8): This level is a key resistance. If QQQ can break and hold above 470, it could indicate further strength towards 490. A rejection here would suggest a continuation of the downside.
Yesterday’s Low (457): Below this level, QQQ could test 450 and potentially move lower toward the next support at 425.
Bullish Scenario (Above 470): A break and hold above 475 would signal a stronger move to the upside, with potential resistance at 480 and then 485.
Bearish Scenario (Below 470): If QQQ fails to hold above 470 and breaks to the downside, expect it to target the 460 area. Further breakdowns could lead to a retest of 460 and possibly 450.
Data and Economic Impact:
10 AM Data: Today’s releases, including the ISM Manufacturing Index and JOLTS job openings, could significantly influence sentiment. Positive data may help maintain the market's bounce and push it higher, while weak data could lead to a continuation of the downtrend.
Strategy: Be patient and wait for confirmation. Look for either a rejection or a continuation at these key levels before taking action. We might see some volatility as the market reacts to the incoming data, so managing risk is crucial today.
Final Thought:
As we enter April, the market could either continue to weaken or stabilize depending on today’s economic data and sentiment. Stay nimble and be prepared for a volatile session as we head into a week full of important reports. Keep an eye on 570 for SPY and 485 for QQQ as key levels that will dictate the next moves.
Risk Disclaimer
Disclosure:
The information provided in this article is for educational purposes only and should not be considered as financial advice. Trading and investing in financial markets involve substantial risk, and it is important to conduct your own research and consult with a qualified financial professional before making any investment decisions. The author is not responsible for any financial losses or gains that may result from actions
Trading futures, stocks, and options involves significant risk and is not suitable for all investors. This content is for educational purposes only and does not constitute financial advice.