Stocks, Options and Crypto - Morning Update - March 5th 2025 Trading Plan

Trading Strategy for March 5th, 2025

1. Key Market Recap from March 5, 2025

• Stock Market:

  • S&P 500 futures ($ES) bounced back after Tuesday’s selloff, holding above 5800.

  • Mega-cap tech stocks led the decline but showed some signs of capitulation.

  • European markets rallied 3%+, fueled by Germany’s €500B infrastructure fund.

  • China’s Services PMI rose to 51.4, showing resilience despite trade tensions.

  • Trump administration hints at tariff relief, but no concrete action yet.

  • Sectors outperforming: Technology, industrials, financials.

  • Fear & Greed Index: Dropped to Extreme Fear (18), suggesting markets may be near a short-term bottom.

• Crypto Market:

  • Bitcoin (BTC) traded at ~$88,853, showing strength despite volatility.

  • Crypto stocks (MSTR, COIN, RIOT) gained on news that the Senate passed a bill repealing the crypto tax rule.

  • AI and blockchain-related assets remain in focus after Senator Lummis reaffirmed support for BTC in U.S. reserves.

Technology stocks, particularly semiconductors like AMD and Taiwan Semi (TSM), are showing notable strength with significant institutional options activity. Meanwhile, energy stocks face pressure as crude oil futures drop more than $2 per barrel following OPEC+ output increase plans and tariff concerns.

The economic data released shows Factory Orders for January at 1.7%, exactly matching estimates, which hasn't provided a strong directional catalyst for the broader market. Chemical stocks are among the day's standout performers with companies like CE (+9.3%), DOW (+4.6%), and LYB (+4.0%) posting substantial gains.

Market breadth remains positive despite early volatility, suggesting potential for an upward grind, though option flows are described as "pretty quiet in first hour overall," reinforcing the possibility of continued sideways action through the trading session.

2. Market Sentiment & Key Events Moving Forward

Bullish Factors:

• German stimulus of €500B could boost industrial stocks.

• Mega-cap tech stocks rebounding from key support levels.

• China’s fiscal stimulus (maintaining a 5% GDP target) is supportive for global equities.

• Crypto adoption narrative strengthening (Senator Lummis pushing BTC reserves).

• U.S. easing stance on tariffs (potential relief for trade-heavy sectors).

• The market appears to be showing mixed signals with a potential "sideways day shaping up" according to the option flow commentary.

• Chemical stocks are among the best performers in the S&P with CE (+9.3%), DOW (+4.6%), and LYB (+4.0%) showing strength.

• Economic data shows US Factory Orders for January at 1.7%, in line with estimates.

• Oil is declining with "U.S. CRUDE FUTURES FALL MORE THAN $2 A BBL ON OPEC+ OUTPUT INCREASE PLANS AND TRUMP TARIFFS."

• Market breadth remains positive despite early dips, suggesting potential for an upward grind.

Bearish Factors:

• Fear & Greed Index at Extreme Fear (18) suggests investor caution.

• Federal Reserve speakers scheduled (Waller & Bostic) could introduce volatility.

• Earnings season volatility (ROST, CRWD, MRNA guidance disappointments).

• Jobs data Friday may impact market trajectory significantly.

3. Trading Strategies & Key Levels to Watch

S&P 500 Futures ($ES)

• Support: 5750 (long-term), 5798 (major)

• Resistance: 5858, 5875 (must reclaim for bullish continuation)

• Trade Plan:

  • Bullish scenario: If 5858 reclaims, potential long play to 5902-5930.

  • Bearish scenario: If 5798 fails, likely move to 5750 and possibly 5720.

  • High probability setup: Reclaim of 5798 with volume could lead to a bounce.

Trade Idea #1: $BABA (Alibaba)

• Day Trade or Swing: Swing Trade

• Direction: Bullish

• Type of Setup: China economic recovery play

• Current Price: $136.50

• Option Play: Call options

• Strike Price: $140 March 2025

• Entry: $135-137

• Target: $145-150

• Stop Loss: Below $132

• Trade Rating: 9/10

• Rationale: Strong China Services PMI and Chinese equity rally indicate bullish momentum.

• News Today: China’s fiscal expansion boosting industrial and retail sectors.

• Best Time to Enter: Pre-market dip buy

• Expected Profitability Days: 3-7 days

• Risk Reward: 3.5:1

• Trump Impact: Tariff negotiations could impact China ADRs.

• Probability of Success: 88%

📌 Trade Idea #2: $MRNA (Moderna)

• Day Trade or Swing: Swing Trade

• Direction: Bullish

• Type of Setup: Insider Buying

• Current Price: $33.15

• Option Play: Call options

• Strike Price: $35 April 2025

• Entry: $32.50-33.50

• Target: $38-40

• Stop Loss: Below $31

• Trade Rating: 8.5/10

• Rationale: CEO purchased $5M in stock, showing confidence in long-term growth.

• News Today: Earnings beat expectations, strong guidance.

• Best Time to Enter: Mid-day pullback entry

• Expected Profitability Days: 5-10 days

• Risk Reward: 3:1

• Trump Impact: Tariffs could impact pharma imports but limited direct exposure.

• Probability of Success: 85%

• Markets are stabilizing after a sharp correction.

• Key focus on Mega-cap Tech, Crypto, and Chinese equities.

• Strong bounce candidates: NVDA, BABA, PLTR, BTC.

• Volatility still present – Risk management is key.

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