DCG AI TRADING GAMEPLAN - POWELL'S TARIFF WARNING TRIGGERS MARKET SELLOFF April 16, 2025 Market Update

MARKET NEWS SUMMARY

Markets faced significant selling pressure today following comments from Fed Chair Powell regarding the economic impact of tariffs. Powell indicated that the effects would be "larger than expected" and could push the economy "away from the Fed's goals" through the rest of 2025. This escalation in trade war concerns has particularly damaged semiconductor stocks, with major players announcing substantial charges due to China export restrictions. In contrast, traditional safe havens like gold surged, hitting $3,333, while Bitcoin also saw gains as investors sought inflation hedges amidst the growing trade tensions. The S&P 500 was reported down 2.01%, and the NASDAQ Composite was down 3.00%

MARKET RECAP & KEY HEADLINES

MAJOR INDICES (as of 12:05pm PST)

• S&P 500 E-mini Futures (ES): 5,270.50 (▼ 2.01%)

• VIX (Volatility Index): 33.60 (▲ 4.02%)

• Gold Futures (GC): 3,355.5 (▲ 0.02%)

• U.S. Dollar Index (DXY): 99.309 (▼ 0.06%)

• Crypto Total Market Cap: 2.61T (▼ 0.56%)

TODAY'S TOP HEADLINES

• Powell Warns Tariff Impact "Larger Than Expected" - Comments trigger broad market selloff

• Chip Stocks Plummet - NVDA announces $5.5B charge, AMD $800M charge on China restrictions

• Gold Steady at $3,355 - Continues strong performance amid market uncertainty

• Crypto Markets Mixed - Bitcoin at $83,974, ETH at $3,563, most altcoins showing weakness

• Energy Transfer Signs LNG Development Deal - Lake Charles facility partnership with MidOcean Energy

• Hong Kong China H-Shares Index Down - Falling 0.06% to 7,824.60

Stock Market News

• Fed Chair Powell stated tariff impacts would be "larger than expected" and would likely push the economy "away from the Fed's goals"

• S&P 500 down 2.01%, NASDAQ down 3.00%

• Gold reached $3,333, continuing its best start to a year in half a century

• NVDA announced $5.5B charge related to China H20 AI chips export restrictions

• AMD announced $800M charge on similar restrictions

• ASML reported China business reduced from 41% to 27%

• BofA slashed price target on Broadcom (AVGO) based on tariff concerns

• Energy Transfer (ET) signed agreement with MidOcean Energy to jointly develop Lake Charles LNG export facility

• OpenAI (MSFT) releasing two models, O3 and O4-mini, incrementally available starting today

Trump-Related Trading News

• U.S. officials plan to use negotiations with 70+ nations to disallow China shipping goods through their countries (WSJ)

• US weighing penalties to block DeepSeek from US tech buys (NYT)

• China pivoting from US to Canada for more oil amid trade war

• DOJ announced civil lawsuit against Maine Department of Education related to Trump's Executive Order

• Industrial stocks identified as having better valuations compared to Technology amid tariff concerns

• UBER and ADP specifically identified as "truly and completely unaffected by the current on-going Trade-War and Tariffs"

• US Steel (X) showing strength, potential beneficiary of steel tariffs

MARKET SENTIMENT ANALYSIS

Key Drivers Today:

• Fed Chair Powell's warning that tariffs will push economy "away from Fed's goals" for 2025

• Significant semiconductor export restrictions impacting tech sector

• Flight to safe havens (gold, Bitcoin) amid inflation and trade war concerns

• Tariff-resistant sectors showing relative strength in down market

Sector Momentum:

• BULLISH: Energy, Industrial (Tariff-Resistant), Select Healthcare, Materials

• BEARISH: Semiconductor/Technology, Automotive, Consumer Discretionary, Financial Services

• MIXED/NEUTRAL: Software/Cloud, Defensive Utilities, Select Retail/Services

HIGH-CONVICTION TRADE OPPORTUNITIES

LONG POSITIONS (TARIFF-RESISTANT)

1. ET - Energy Transfer (Lake Charles LNG Development)

• Type: Swing (Long)

• Entry: $17.00-17.25

• Target: $20.00 (+16%)

• Stop: $15.80 (-7%)

• Options: Jan 2027 $13 calls

• Probability: 85%

• Timeframe: 30-60 days

• Key Insight: Strong institutional options positioning with 15,000+ contracts

• Risk Management: Reduce position by half at stop level

2. UBER - Tariff-Resistant Digital Business

• Type: Swing (Long)

• Entry: Current price

• Target: +12%

• Stop: -6%

• Probability: 85%

• Timeframe: 21-28 days

• Key Insight: 80% Waymo utilization in first 27 days shows autonomous driving traction

• Risk Management: Exit completely at stop level

3. X - U.S. Steel (Domestic Steel Tariff Beneficiary)

• Type: Swing (Long)

• Entry: Current price

• Target: +15%

• Stop: -7%

• Options: May $38 calls

• Probability: 80%

• Timeframe: 14-28 days

• Key Insight: Showing strength (green) on a deeply red market day

• Risk Management: Switch to put position for reversal if stop triggered

4. ADP - Tariff-Immune HR Solutions

• Type: Swing (Long)

• Entry: Current price

• Target: +10%

• Stop: -5%

• Probability: 80%

• Timeframe: 21-28 days

• Key Insight: Software business model insulated from supply chain disruptions

• Risk Management: Reduce to half position at stop level

5. DHR - Healthcare Relative Strength

• Type: Swing (Long)

• Entry: Current price

• Target: +10%

• Stop: -5%

• Options: August $240 calls

• Probability: 80%

• Timeframe: 21-28 days

• Key Insight: Maintained green status during broad market selloff

• Risk Management: Exit 75% of position at stop level

6. SNOW - Cloud Software Resilience

• Type: Swing (Long)

• Entry: Current price

• Target: +12%

• Stop: -6%

• Options: August $200 calls

• Probability: 75%

• Timeframe: 21-28 days

• Key Insight: Institutional stock replacement via call options indicates confidence

• Risk Management: Exit completely at stop level

7. HUM - Healthcare Defensive Play

• Type: Swing (Long)

• Entry: Current price

• Target: +8%

• Stop: -4%

• Options: May 2nd $320 calls

• Probability: 75%

• Timeframe: 14-21 days

• Key Insight: Defensive healthcare positioning with strong relative performance

• Risk Management: Exit half position at stop level

SHORT POSITIONS (TARIFF-VULNERABLE)

1. SMH - Semiconductor ETF (Export Restrictions)

• Type: Swing (Short)

• Entry: Current price

• Target: -10%

• Stop: +5%

• Probability: 85%

• Timeframe: 14-21 days

• Key Insight: Multiple companies announcing billion-dollar charges from China restrictions

• Risk Management: Exit at stop and reassess sector fundamentals

2. CARZ - Auto ETF (Supply Chain Disruption)

• Type: Swing (Short)

• Entry: Current price

• Target: -12%

• Stop: +6%

• Probability: 80%

• Timeframe: 21-28 days

• Key Insight: Powell warned auto supply chains will be "disrupted for years"

• Risk Management: Exit completely and avoid sector if stop triggered

3. SPOT - Spotify (Bearish Options Positioning)

• Type: Swing (Short)

• Entry: Current price

• Target: -15%

• Stop: +7%

• Options: May $500 bear synthetics

• Probability: 75%

• Timeframe: 14-28 days

• Key Insight: Large institutional bearish options positioning (3000 contracts)

• Risk Management: Exit completely at stop level

CRYPTO MARKET ANALYSIS

Current Crypto Prices (as of 12:06pm UTC-7)

• Bitcoin (BTC/USD): $83,974.56 (-0.56%)

• Ethereum (ETH/USD): $3,563.37 (-0.16%)

• Solana (SOL/USDT): $129.81 (+0.47%)

• Binance Coin (BNB/USDT): $582.53 (+0.07%)

• Litecoin (LTC/USDT): $74.47 (-0.31%)

• AVAX/USDT: $31.01 (-0.15%)

• AAVE/USDT: $132.70 (+0.13%)

Crypto Technical Analysis

• Bitcoin showing mild weakness after recent rally, not making new session highs

• Several charts (ETH, AVAX, LTC) showing bearish red resistance levels

• SOL and BNB displaying relative strength with slight gains

• Multiple "Sell" indicators visible across crypto charts

• Support/resistance levels clearly defined with price action at critical decision points

ADDITIONAL TRADE OPPORTUNITIES

Gold Exposure

• Gold futures steady at $3,355.5, showing resilience amid market volatility

• Mining stocks like NEM, GOLD could offer leveraged exposure to precious metals rally

Alternative Energy

• With focus shifting to domestic energy production, renewable plays may find support

• Consider selective exposure to ICLN components with US-based operations

Defense Sector

• Geopolitical tensions typically boost defense contractors

• LMT, RTX, NOC worth monitoring for relative strength

GLOBAL MARKET INDICATORS

Key Markets (as of 12:05pm PST)

• UK 100 Index: 8,276.61 (+0.01%)

• Hong Kong China H-shares Index: 7,824.60 (-0.06%)

• Nikkei/USD Futures: 33,790 (-0.24%)

TRADE EXECUTION STRATEGY

For Today (April 16):

1. Focus on relative strength names showing green in today's red market

2. Prioritize entry on ET (Energy Transfer) given strong institutional positioning

3. Establish core short position in SMH (semiconductor ETF) as hedge

4. Consider selective crypto exposure in stronger performers (SOL, BNB) if sector stabilizes

5. Caution with Bitcoin positions as chart shows multiple sell signals with resistance at $84,100

6. Monitor European markets for potential global rotation opportunities

7. Hold cash reserves (30-40%) for potential opportunities after OPEX volatility

UPCOMING CATALYSTS

• April 17, 2025: Monthly options expiration (OPEX) - expect volatility

• April 17-18, 2025: Continued Powell testimony/speeches

• Upcoming: Ally Financial (ALLY) earnings

• Upcoming: CRWV first earnings report

• Ongoing: Trade war developments and tariff implementation details

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