S&P 500 Daily Update for Wednesday April 9, 2025

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Summary of the Daily Update for Tuesday, April 8th, 2025:
The market experienced a disappointing day on Tuesday, April 8th, despite a promising start with a gap higher open, buoyed by strong performances in Japan (up over 6%) and Europe. However, the market hit resistance at Monday's high (a pivot level at 5261) and saw a steady decline throughout the day, closing down 1.57% on above-average volume. The S&P dropped below key levels such as 5,000, finding some support at 4,910 but still ending below 5,000. This downturn erased an initial 4% gain, resulting in a significant 5.5% intraday swing, driven largely by escalating fears over a U.S.-China trade war, with the White House confirming 104% tariffs on Chinese imports effective April 9th.
Market sentiment is extremely negative, with the VIX spiking to 52.33—well above levels that signal concern (20) or nervousness (40). Numerous technical indicators across short, intermediate, and long-term timeframes (e.g., ADX, MACD, RSI, Stochastic RSI, Williams %R, CCI, and others) are flashing extreme oversold conditions, yet selling pressure persists, with "buy the dip" strategies failing as professional traders dominate the market. The S&P is below its 200-day and 50-day moving averages, raising fears of a potential "death cross" (50-day crossing below 200-day), a bearish signal already seen in small and mid-cap indexes.
Economic and market internals reflect growing pessimism. The flight to safety is not occurring with bond yields rising to 4.26% (up from 3.99% last Friday), while the dollar weakened. Sentiment readings are at a low of 4 (below the concerning threshold of 25), and the 10-year to 3-month yield curve has flattened, hinting at recession risks. The NFIB Small Business Optimism Survey dropped from 100.7 to 97.4, signaling economic uncertainty. Financial conditions tightened due to the tariff escalation, and GDP forecasts are being revised downward, with some predicting negative growth that could confirm a recession if sustained.
Major indexes and sectors are struggling. Mega Caps and Semiconductors, which performed well on Monday, faltered Tuesday. Growth and value stocks both took hits, with small and mid-caps showing particular weakness. The Dow, NASDAQ, and S&P are all trending below key moving averages, with some nearing death crosses. Among the "Magnificent Seven," Apple (-4.9%), Tesla (-4.9%), and Amazon (-2.62%) saw significant declines, while Netflix was a rare gainer (+0.3%). Financials held up relatively better, but defensive sectors such as utilities and healthcare also declined.
Looking ahead to Wednesday, April 9th, futures are down over 2% eight hours before the open, suggesting continued negativity. Key data releases include the Fed meeting minutes at 2 p.m. ET, MBA Mortgage Applications, and wholesale inventories, though the market’s focus remains on trade war developments. Seasonality trends, typically positive for April, are being ignored amid current volatility. While oversold conditions suggest a potential bounce, no clear reversal is in sight, and the market remains in a short- and intermediate-term downtrend, with long-term trends mixed but at risk of turning bearish if the 200-day moving average isn’t reclaimed soon. A close below the 20% decline threshold from February’s high would officially signal a bear market, currently at 18.9% intraday.

PDF of Charts and Slides used in today's video:
https://drive.google.com/file/d/1QV6YUFUAqJuui74_srCQIGKCjtT6gM2F/view?usp=sharing

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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!