Stocks, Options, Futures and Crypto - FINANCIAL ARMAGEDDON: MARKETS SUFFER WORST TWO-DAY PLUNGE SINCE 2020 AS WORLD BRACES FOR GLOBAL TRADE WAR - April 6, 2025

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MARKET SUMMARY -

The past week has been nothing short of catastrophic for global markets, with the S&P 500 suffering its worst two-day plunge since March 2020, erasing approximately $5 trillion in market value. China's announcement of 34% retaliatory tariffs on all U.S. imports, coming in response to President Trump's sweeping "Liberation Day" tariff package, has pushed major indices into or near bear market territory.

This week shapes up to be equally critical, with multiple high-impact catalysts including Fed speeches, the FOMC minutes release, Thursday's CPI report, and major bank earnings on Friday. The inflation report will be particularly scrutinized as markets assess whether tariffs are already pushing prices higher, potentially limiting the Fed's ability to cut rates despite growing recession fears.

TRADING ANY ASSET YOU MUST UNDERSTAND HOW THE FUTURES LEVELS ARE CRITICAL TO ALL MARKETS..

Current Market Context (as of April 6th, 2025)

• S&P 500 E-mini Futures (ES): Closed at 5,096.75, down 9% for the week ending April 4th, the largest weekly decline since the 2020 COVID crash. The market is in a fear-driven state following the Tariff Black Swan Event on April 2nd, with the VIX at a 5-year high of 45 (a 3-standard-deviation move, statistically rare). The SPX is near the 5,000 level, a major gamma and open interest support, which could trigger a snapback rally if dealers buy to stabilize prices.

• Bitcoin (BTC/USD): Recovered to 79,478.94 from a low of 70,818.72 earlier on April 6th, showing resilience as a safe-haven asset amid equity market turmoil. It’s approaching resistance at 80,317.70.

• Market Sentiment: AAII sentiment shows a bull-bear spread of -40.2%, with bearish responses at 61.9%, indicating extreme fear. The CNN Fear and Greed Index is at 4 (Extreme Fear), and the VIX/VXV ratio is at 1.23, the highest since March 2020, signaling potential for a market low.

• Seasonality: Per the Trader’s Almanac, April typically ends the best six months of the year, but a weaker April can lead to volatility into late Spring/Summer. The week of April 7th-11th shows mixed seasonality, with Tuesday (April 8th) being the strongest day (66.7% up for Dow, 61.9% for S&P). Strength often increases after the Tax Day deadline (April 15th), and the options expiration week (April 14th-17th) is historically strong.

• Tariff Impact: The market is reeling from the tariff shock, with 33 countries reportedly negotiating with the U.S. over tariffs. New tariffs take effect on April 9th, which could exacerbate risk-off sentiment unless positive developments emerge.

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With market conditions at their most volatile since the pandemic, our comprehensive trading clinic launches at the perfect time to help you navigate this historic market environment. Starting Monday, our expert instructors will provide:

• Level-to-level trading strategies specifically for high-volatility environments

• Failed breakdown and breakdown short setups (which excelled during last week's collapse)

• Defensive sector rotation tactics to protect capital while maintaining exposure

• Options strategies for both portfolio protection and high-probability trade setups

• Real-time analysis of each day's critical economic releases and Fed speeches

Last week's price action demonstrated the classic pattern we teach - violent "elevator down" selloffs followed by sharp bear market rallies. Our clinic will help you identify these patterns before they occur, giving you the edge needed in these challenging conditions.

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Key Week Ahead Catalysts

1. Economic Data: CPI (Thursday), PPI (Friday), JOLTS (Tuesday), FOMC Minutes (Wednesday)

2. Earnings Season Begins: Major banks report Friday (JPM, WFC, MS, BLK, BK)

3. Fed Speakers: Nine Fed speakers scheduled throughout the week

4. Tariffs Impact: New country-specific tariffs become effective Wednesday

• Key Setups: The best opportunities are likely around CPI (April 10th), FOMC Minutes (April 9th), and bank earnings (April 11th). Focus on clean reclaim levels and trade level-to-level.

• Market Sentiment: The market is in a fear-driven state (VIX at 45, CNN Fear and Greed at 4). A VIX drop below 35 is needed for stability, and below 30 for a stronger rally.

• Tariff Impact: New tariffs on April 9th could pressure risk assets, but positive developments (e.g., negotiations with 33 countries) could trigger relief rallies.

This plan will be updated daily as new market data and news emerge.

This week presents both extreme risk and opportunity as markets digest the tariff shock. With volatility at extreme levels, position sizing must be reduced by 40-50%. The strategy will balance defensiveness with targeted setups in sectors showing relative strength.

Key approaches:

1. Play oversold bounce potential with April typically a strong month

2. Focus on specific sector strength rather than broad market plays

3. Exploit elevated options premiums through strategic credit spreads

4. Implement defined risk strategies with tight stops in this high-volatility environment
   
   Let me know if you’d like to attend or trade inside our mastermind trading environment!

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