Recap & Current Market Context & Game Plan
March 20, 2025
The market remains highly volatile following the FOMC decision, with investors grappling with the implications of slowing GDP growth, rising inflation forecasts, and higher unemployment expectations for 2025. ES failed to hold the 5700 level, dropping sharply overnight, reversing all bullish momentum from the prior session.
Despite an initial attempt to break higher, sellers stepped in aggressively, leading to a bear flag breakdown scenario. The question now is whether the market will continue this downward momentum or attempt another push toward resistance levels.
Adding to the uncertainty, President Trump’s latest tweet urged the Fed to cut rates sooner rather than later—a sign that the political influence on monetary policy could increase as the election cycle heats up.
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Market Technicals & Key Levels
Based on the daily, 4-hour, and 30-minute charts, here are the critical levels and setups to watch:
ES (S&P 500 E-Mini Futures)
Daily Chart:
ES is still above the 9 EMA, struggling to reclaim the 21 EMA at 5700.
If ES can hold above 5700, we could see another push toward 5750-5800.
Failure to reclaim 5700 will likely lead to a retest of 5650, with a deeper sell-off possible.
4-Hour Chart:
A higher high and higher low pattern is still in place, suggesting a potential attempt to hold support.
However, 21 EMA remains a key test zone—a rejection here could signal more downside.
30-Minute Chart:
A sharp sell-off overnight has wiped out bullish momentum.
Key intraday level: 5700—break and hold above = bullish bias; failure = potential continuation of the bearish trend.
NQ (Nasdaq Futures)
Holding the 19,600 support zone but remains under pressure.
Resistance at 19,800-20,000—reclaiming this level could bring short-term bullishness.
Below 19,400 = accelerated selling.
Broader Market Sentiment: Stagflation Fears
The market’s reaction suggests that stagflation is now a real concern:
GDP projections are down, but inflation estimates are up.
Unemployment is rising, which could indicate slowing economic momentum.
Bond yields remain elevated, signaling investor skepticism about future growth.
With VIX climbing back toward 23, volatility is increasing, but it’s still not at panic levels. If we see a VIX spike above 25-30, expect much sharper sell-offs.
Game Plan & Trade Setups
Given these factors, here’s the trading approach I’m considering:
Bullish Scenario: If ES reclaims 5700 and holds above it, I will look for long positions toward 5750-5800.
Bearish Scenario: If ES fails 5700 and breaks below 5650, I will switch to short positions targeting 5600-5550.
Watching Tech Stocks: If NQ breaks 19,400, it could trigger a sharper decline in NVDA, TSLA, and AAPL.
VIX Watch: A break above 23-25 would confirm increasing fear—leading to broader market weakness.
Final Thoughts
The market is at a critical juncture, with stagflation fears, global capital rotation, and political pressure on the Fed all playing key roles. 5700 remains the battleground level—above it, bulls have a chance; below it, bears remain in control.
Let’s see how the market reacts in the next session.
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 taken based on this article.
Risk Disclosure: Futures, foreign currency and options trading involves substantial risk and is not appropriate for everyone.
Disclaimer:
Futures, foreign currency, and options trading involve substantial risk and are not suitable for all investors. This content is for educational purposes only and should not be considered financial advice.