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Our View

Over-investment in the top 7 to 10 stocks, the Fed cutting rates while inflation was going up, the U.S. deficit at $36.7 trillion, lower consumer confidence and spending, slower growth, recession fears, earnings growth at risk as tariffs raise costs and erode margins, a softening labor market, geopolitical clashes, and last but not least, President Trump's unending tariffs. These problems have created an environment of uncertainty and a big jump in the CBOE's fear gauge, the VIX, which traded all the way up to 30.02. The last time it was this high was August 5, 2024.

The index markets had their steepest declines since 2020 and wiped out $2.7 trillion in market cap. The Dow dropped 1,679 points or 4%, and the tech-heavy Nasdaq—which powered the market higher for years—was down 6%, pulled lower by big declines in $NVDA, $AAPL, and $AMZN. The S&P 500 fell 4.8%, and the other benchmarks suffered their sharpest declines since the early days of the Covid-19 pandemic.

There are thousands of ways to get fooled by the ES and NQ when they start going up, it's human nature, but the down move sees no bounds. I know there are a lot of really good newsletters out there, some even give "tips." That is not how this works. First, I try to provide a newsletter that supplies a feel of the markets. Sometimes it's a few sentences, and other times it's just a straight look at what's going on.

Today is the March jobs report, and it could be a pivotal day. Let me explain. In the MrTopStep Trading Rules 101 (https://mrtopstep.com/trading-101/), there are some rules that still work. If you scroll down, you’ll see one called Counter Trend Friday.

Counter-Trend Friday: Over the years, this trade works best on monthly NFP jobs Fridays when the S&P futures gap sharply higher or lower on oversized pre-market Globex volumes of 400k+ ES contracts before the 8:30 am CT open. This is a fade, “the bus is too full” type of trade.

Example: The S&P is down 15 handles at 6:00 am and then down another 20–30 or more handles after the jobs number is released. Now, the S&P is down sharply at the 9:30 am open. With 400k+ minis traded before the open, this tells us that traders have already voted (sold). Depending on the price action, the idea is to buy a sharply lower open or allow the first drop after the gap down. The idea behind this is that with so many minis traded and it being a Friday—and knowing most traders can’t hold the futures over the weekend—they put in buy stops, and the algorithms go right for the buy stops. With all the selling used up pre-open, the ES will start to short cover into the buy stops that lift the offer side of a buy program.

I revised one part of the rule: you buy the lower open or the first drop below the gap down. This would also work in reverse for a big gap up. My gut tells me it’s “FRYday” today, and with the E-mini S&P 500 (ES) falling from its Wednesday high of 5,771 to last night’s early Globex low of 5,407.50—a drop of 364 points in just over 26 hours—the pace is stunning. Yesterday’s breakdown opened the door to 5,300–5,400, yet I didn’t expect it to happen this fast. The decline is accelerating.

Meanwhile, the dollar suffered its sharpest drop since 2023. When asked about the decline, Trump said, “I think it’s going very well; the markets are going to boom.” Oil plunged 6%, and gold fell 1.5% early in the day to $3,087 before rallying $72 from its low, climbing back to $3,140.00.

MiM and Daily Recap

The S&P 500 futures (ES) endured a volatile and directional session Thursday, closing markedly lower with consistent selling pressure across the day. The market opened the regular session at 5512.00 and briefly pushed to an early high of 5540.50 at 9:33 AM. This initial strength added 49.25 points from the 9:00 low of 5491.25, but it marked the session’s highest print.

A sharp reversal followed, driving ES down to 5455.00 by 11:06 AM, the morning’s deepest pullback, registering a 1.54% drop from the early high. Buyers briefly regained control through midday, carrying prices to a lower high of 5524.50 at 12:30 PM—an impressive 69.50-point rebound.

That midday strength was again met with selling. A lower high of 5498.00 printed by 1:45 PM, followed by a sharp move down to 5458.00 at 2:30 PM, and a minor lower high at 5483.50 at 2:48 PM. Late-session selling intensified, with the market cascading into a final low of 5415.25 at 4:30 PM, capping a 68.25-point slide from the prior swing high and a full-session loss of 2.33%.

From session to session, ES declined 274.00 points from Wednesday’s cash close of 5695.00 to Thursday’s 5436.00 cash close, a 4.80% drop. The regular session also saw a steep 76.00-point fall from the open to the 4:00 PM close. Volume was robust, with over 1.7 million contracts traded during regular hours and 2.34 million total on the day.

Thursday’s tone leaned decisively bearish, marked by a steady sequence of lower highs and lower lows, and capped by a powerful end-of-day liquidation move. The inability of the midday rally to break above the early high confirmed sellers’ control throughout the day.

The Market-on-Close (MOC) imbalance was notable, with $1.267 billion to buy and a strong dollar imbalance of 75.8% to the buy side. Despite this, the late-session rally failed to materialize. Symbol imbalance reached only 59.8%, below the 66% threshold for a decisive directional read. This suggests that while there was a buy imbalance in dollar terms, it was not broad-based across symbols, and thus didn’t shift the market’s downward momentum.

How to read the MIM

Technical Edge

Fair Values for April 4, 2025

• SP: 37.05

• NQ: 149.71

• Dow: 236.48

Daily Breadth Data 📊

For Thursday, April 3, 2025

• NYSE Breadth: 12% Upside Volume

• Nasdaq Breadth: 29% Upside Volume

• Total Breadth: 26% Upside Volume

• NYSE Advance/Decline: 13% Advance

• Nasdaq Advance/Decline: 17% Advance

• Total Advance/Decline: 15% Advance

• NYSE New Highs/New Lows: 53 / 547

• Nasdaq New Highs/New Lows: 54 / 856

• NYSE TRIN: 1.09

• Nasdaq TRIN: 0.49

Weekly Breadth Data 📈

Week Ending Friday, March 28, 2025

• NYSE Breadth: 42% Upside Volume

• Nasdaq Breadth: 51% Upside Volume

• Total Breadth: 48% Upside Volume

• NYSE Advance/Decline: 35% Advance

• Nasdaq Advance/Decline: 29% Advance

• Total Advance/Decline: 31% Advance

• NYSE New Highs/New Lows: 112 / 204

• Nasdaq New Highs/New Lows: 187 / 610

• NYSE TRIN: 1.20

• Nasdaq TRIN: 0.61

Guest Posts:

Get instant access to our partners’ real-time market data and insights not available anywhere else. Here is last night's Founder’s note getting you ready for today’s market and explaining the constraints in yesterday’s market. - MrTopStep

Founder's Note:

Futures are -2% after China announced tariff retaliation.

HIRO is showing unusually large pre-market/overnight put buying, as shown below. Anecdotally we cannot recall seeing -$650mm of prem-market S&P500 deltas (HIRO signal).

Yesterday AM we were flagging 5,400 as major support, and that served to provide a ~1.2% bounce. However, as noted last night, the positive gamma support at 5,400 deteriorated greatly on that bounce (dealers lost positive gamma), and HIRO signaled longer dated put buying from 2PM - 4PM ET.

Our partners at SpotGamma introduced two new products this week during a webinar. You watch that webinar here:

And take advantage of their 50% off an annual subscription here:

Get instant access to our partners real-time market data and insights not available anywhere else. Here is last night Founder’s note getting you ready for today’s market and explaining the constraints in yesterday’s market. - MrTopStep

Trading Room News:

Polaris Trading Group Summary - Thursday, April 3, 2025

Today’s trading session in the PTG room, led by PTGDavid, was marked by a steady downtrend and persistent bearish pressure, culminating in what David humorously referred to as an "Ass-Whooping" — a technical term coined for days with index drops exceeding 3%.

Early Session Highlights:

• Initial Bias: David signaled a long side lean early on, but emphasized flexibility based on the developing rhythm of the market.

• First Trade: @CL OPR Short Target 1 was successfully filled, marking a solid start.

• MATD (Morning After Trend Day) rhythms played out within expected range rules.

• The market was choppy around 10am with econ data releases (ISM, SVC) and a reclaim attempt of the overnight low.

Midday Action:

• The bears dominated, sending the indexes tumbling. The phrase "bulls continue to slip on the soap bar" summed it up as price levels like 5470 were tagged.

• Trump-related headlines spiked volatility in NQ, spoiling a potential long.

• By lunchtime, David noted a mid-VWAP consolidation, and the room recharged for the afternoon.

 Afternoon Breakdown:

• 2PM brought the "shake n bake" as selling pressure continued. Bulls failed to defend IB Low (5475), suggesting intent to test lower price levels.

• High Volume Climax Bars began appearing, but were met with more resistance.

• Despite a late 600M MOC Buy Imbalance, there was no real bullish follow-through—just continued exhaustion of buyers.

 Lessons & Takeaways:

• Key technical zones (like IB Low and the DLMB) acted as inflection points, but resistance was strong at every bounce.

• Staying flexible and following rhythm-based trading was emphasized again today—David guided the room through the chop and the downtrend effectively.

• Humor helped lighten the intense bearish tone, but the market offered great lessons in discipline and recognizing failed bounce attempts.

 Notable Quotes & Moments:

• “The Selling Will Continue Until Morale Improves!” – PTGDavid

• “Bulls continue to slip on the soap bar” – A vivid image of the day’s failed rallies

• “Ass-Whooping” – Now officially defined on the PTG glossary!

Overall, it was a challenging but educational day with successful early shorts, clear intraday structure analysis, and reinforcement of patience when bulls show no strength. Great work by the team keeping it light in a heavy market!

Let me know if you'd like charts or key price levels highlighted!

DTG Room Preview – Friday, April 4, 2025

• Market Meltdown on Tariff Shock

  • The S&P 500 and Nasdaq suffered their worst single-day drops since 2020.

  • Roughly $2.5 trillion in market cap was erased following Trump’s “Liberation Day” tariff announcement.

  • Trump stated the rollout is “going very well” and that he’s open to “phenomenal” offers to negotiate new tariff terms.

  Legal Challenge to Tariffs

  • The New Civil Liberties Alliance filed a lawsuit in Florida federal court.

  • The suit, on behalf of Florida-based retailer Simplified, aims to block the implementation of the new tariffs and reverse changes to the U.S. tariff schedule.

  Fed Rate Expectations Shift

  • Markets now anticipate 3–4 rate cuts in 2025 amid slowing growth concerns tied to the tariffs.

  • The Fed remains cautious, with Governor Lisa Cook suggesting tariff-driven inflation could support maintaining a restrictive policy longer.

  Focus on Jobs Report (8:30am ET)

  • The March Jobs Report is the central economic release today.

  • While important, it’s unlikely to outweigh recession fears stemming from the tariff regime.

  • No notable corporate earnings on the calendar.

  Fed Speaker Schedule Today

  • Fed Chair Jerome Powell – 11:25am ET

  • Fed Governor Michael Barr – 12:00pm ET

  • Fed Governor Christopher Waller – 12:45pm ET

  Volatility and Key ES Levels

  • Volatility has surged, with the ES 5-day average range now at 176.50 points.

  • Overnight positioning shows a large trader “whale” long bias ahead of the Jobs Report.

  • ES technicals:

    • Support: 5380/75s (intermediate-term channel bottom), 5237/32s

    • Resistance: 5707/02s, 6205/00s

  • Thursday’s selloff respected the channel bottom, but today's Jobs Report could trigger a breakout in either direction.

    

Calendars

Economic Calendar Today

This Week’s High Importance

Earnings:

Full Calendars

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Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.

Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!!

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