Market Insights: Thursday, April 10th, 2025

Market Overview

Markets reversed violently on Thursday, giving back a sizable chunk of Wednesday’s historic gains after investors digested new details from the White House on escalating tariff actions. The Dow plunged over 1,000 points, while the S&P 500 dropped nearly 3.5% and the Nasdaq tumbled 4.3%, as confirmation emerged that U.S. tariffs on Chinese goods will climb to a staggering 145%, not the previously stated 125%. The update blindsided markets, which had just rallied hard on hopes of easing trade tensions. While Wednesday’s pause on many tariffs lifted sentiment temporarily, Thursday’s clarification marked a return to risk-off trading, as Wall Street recalibrated the true scope of President Trump’s aggressive trade stance. Analysts noted the market is once again caught between moments of de-escalation and renewed confrontation. Inflation data released Thursday showed some easing, with the March CPI rising just 2.5% annually and posting a surprise monthly decline of 0.1%. However, that was quickly overshadowed by tariff worries, which remain firmly in the driver’s seat. By late afternoon, traders were left grappling with a market that’s trying to find direction in a fast-changing geopolitical and macro landscape. While inflation data briefly helped cool rate fears, it wasn’t enough to offset the blow of higher Chinese tariffs and growing uncertainty around global growth.

SPY Performance

SPY closed down 4.34% on Thursday at $524.80 after opening at $532.25 and briefly rallying to a high of $533.50 before sellers took firm control. The ETF plunged to an intraday low of $509.58 before clawing back some losses late in the day. Volume again came in massive at over 151 million shares—more than double the norm—highlighting just how jittery and reactive the market remains in the wake of Wednesday’s explosive rally and Thursday’s reversal. Despite holding just above the $525 mark into the close, SPY now finds itself well below the critical $535 support zone and is trading near the midpoint of the broader downtrend channel.

Major Indices Performance

The Nasdaq led the decline with a 4.31% drop as tech stocks bore the brunt of the renewed selling. The Russell 2000 followed closely, sliding 4.28% and reflecting deep losses across small caps. The S&P 500 sank 3.5%, while the Dow shed 2.55%—losing over 1,000 points on the day. The tariff escalation hammered sentiment across the board, especially after the market had just rallied on hopes of a policy shift. Sectors across the board turned lower, with tech and growth names hit hardest. Thursday’s action underscored how fragile investor confidence remains, with wild swings in sentiment tied directly to each new trade headline.

Notable Stock Movements

The Magnificent Seven got decimated Thursday, leading the broad-based market decline. Tesla dropped over 7%, extending its whiplash-inducing week, while Meta and Nvidia each fell close to 6%. The rest of the group also contributed to the heavy selling, with no safe havens in sight among mega-cap tech. The sharp reversal in sentiment from Wednesday’s rally to Thursday’s collapse shows just how sensitive these high-flying names are to macro uncertainty. Tech’s outperformance vanished in a flash, replaced by a market still digesting what a prolonged tariff battle might mean for earnings and growth.

Commodity and Cryptocurrency Updates

Crude oil slid 3.32% to settle at $60.27, continuing its decline and finally reaching the lower end of our long-standing $60 target zone. We continue to expect a drop toward $50, where we will look to enter long positions. Gold surged 3.70% to $3,193 as traders fled risk and looked to hedge growing macro instability, helped along by Thursday’s lighter CPI reading. Bitcoin gave up 3.98%, closing just above $79,800. We remain buyers between $77,000 and $83,000, but stress the importance of staying out of the trade below $77K due to the elevated risk of a steep correction.

Treasury Yield Information

The 10-year Treasury yield closed marginally higher at 4.408%, rising just 0.27% despite a day full of volatility. The modest move suggests a balanced tug-of-war between inflation relief and renewed risk aversion. With yields still below the critical 4.5% threshold, equities have breathing room—but any push above that level could reignite fears of a larger correction. For now, rates are elevated but stable, reflecting uncertainty more than conviction. A close above 4.8% would be a warning shot, and above 5.2% could trigger a serious drawdown in equities.

Previous Day’s Forecast Analysis

Wednesday’s analysis had projected a broad range of $525 to $565 with a bullish tilt, expecting SPY to remain strong if it held above $535. The model emphasized buying dips toward $535 and warned of a potential breakdown if that level was lost. It noted a break above $555 would clear the way for a move toward $570, while a move below $530 could set the stage for a retest of $500. The strategy was to stay long from support, noting that volatility was still high and advising traders to keep stops wider and position sizes smaller. With the VIX at 33, it suggested a more stable environment, but also warned traders to be nimble given ongoing tariff drama.

Market Performance vs. Forecast

SPY opened Thursday at $532.25—slightly below the key $535 level—and quickly lost ground, dropping as low as $509.58 before closing at $524.80. The session clearly broke below the model’s expected range floor of $525 and invalidated the bullish thesis that hinged on holding $535. While the upside breakout scenario never materialized, the model accurately flagged $530 and $525 as make-or-break zones. Once $530 was breached, sellers overwhelmed the tape, with the session ultimately sliding toward the $510s. Long trades from above $535 failed, while short trades below that level paid off significantly. The unexpected news about the true scale of the China tariffs acted as a bearish catalyst, triggering heavy downside momentum and validating the importance of being prepared for sudden reversals.

Premarket Analysis Summary

In Thursday’s premarket analysis posted at 7:25 AM, SPY was trading at $534.23 and the model advised a cautious upward bias as long as price stayed above $534. The key upside targets were $543 and $547, while downside levels were seen at $534, $532, and $525. The commentary warned that markets might chop and consolidate following Wednesday’s huge rally, while noting that short trades were risky given the extreme prior day volatility. The tone was cautiously bullish, expecting upward attempts but acknowledging the potential for failure, especially if $534 was lost.

Validation of the Analysis

Thursday’s price action ultimately fell outside the optimistic scenario outlined in the premarket notes, but the analysis still offered key insights. The $534 bias level was lost early in the session, and from there, downside targets came quickly into play. The market bounced temporarily near $525 but eventually slipped well below, proving that the range of $525 to $547 was too tight for the magnitude of volatility that followed. The caution about short setups was valid early on, but once the breakdown was confirmed, the door was wide open for downside plays. Traders who respected the levels, especially the loss of $534 and $525, had strong setups to work with—even if the direction flipped more violently than expected.

Looking Ahead

Friday brings another data-heavy day with the release of PPI, University of Michigan Consumer Sentiment, and Inflation Expectations. These events could easily swing sentiment, especially coming after Thursday’s tariff shock. Traders should be prepared for elevated volatility and another round of sharp directional moves. While macro forces—especially tariffs—continue to dominate the headlines, inflation data still has the power to influence bond yields and risk appetite. With earnings season kicking off next week, Friday’s releases may shape the tone heading into a new wave of corporate guidance.

Market Sentiment and Key Levels

SPY closed at $524.80 and is now trading back in the middle of the broader bearish trend channel that’s defined price action since December. Sentiment has shifted back toward caution after the tariff clarification, and bulls have lost near-term control. Key resistance now stands at $530, $535, and $540, while support sits at $520, $515, and $510. If SPY can reclaim $535, bullish momentum could quickly return, with a possible push toward $550. But a break below $520 sets the stage for a test of $500—and if that level fails, further downside could unfold quickly. Market direction remains news-driven, so traders should stay light and reactive.

Expected Price Action

Our AI model projects a wide range of $510 to $540 for Friday, signaling continued trending potential. The market bias has shifted bearish, and unless SPY can recover above $530 early in the session, we expect sellers to remain in control. If the $520 support zone breaks, we anticipate a rapid move to $510, then potentially $500. On the flip side, any surprise upside catalyst—such as a cooler-than-expected PPI—could see SPY reclaim $530 and aim for $535 and $540. This forecast is actionable intelligence. It reflects how quickly sentiment has reversed, and warns that even modest rebounds could meet strong resistance until more clarity emerges on trade and inflation policy.

Trading Strategy

Traders should look to short failed rallies into resistance at $530 and $535, targeting $525, $520, and $515 if price rolls over. Long trades become viable if SPY breaks and holds above $535, targeting $540 and possibly $545. However, the path of least resistance is lower unless bulls regain key levels early. The VIX closed at 40—well above our 35 risk threshold—confirming that volatility remains elevated and conditions are treacherous. In this type of environment, position sizes must be reduced, stop-losses widened, and traders should be ready to flip bias quickly based on price behavior. Stay focused on key levels and avoid chasing price—let the market come to you.

Model’s Projected Range

The model’s maximum projected range stands between $500.25 and $546.75, with the Put side dominating across a narrowing spread—suggesting consolidation, punctuated by periods of trending price action heading into Friday. SPY closed at $524.58 following another highly volatile session that briefly approached limit-down levels on the Nasdaq earlier in the day. This environment bears a striking resemblance to the early stages of the 2000 crash, when sharp selloffs were followed by powerful short-term rallies of more than 10%. Over the subsequent 18 months, the market ground steadily lower, ultimately bottoming in September 2002—down over 50%. A similar pattern unfolded in 2007, beginning in July and culminating in the January 2009 lows, again marked by major counter-trend rallies on the way to a more than 50% drawdown. While we are not forecasting a collapse of that magnitude, it’s important to consider historical parallels and how markets tend to react to economic stress. History doesn’t repeat perfectly—but it often rhymes. Models struggle in these environments, as they are not calibrated for this level of volatility and uncertainty. Volume surged again today, underscoring the intensity of the move. Earnings season kicks off in earnest next week, with major financials leading the charge. It would not be surprising if many companies use tariffs as a reason to lower or sidestep forecasts entirely, adding fuel to an already volatile market ignited by the current administration’s policies. Key resistance levels for tomorrow are at $525, $530, and $535, while support lies at $520, $515, and $510. With SPY closing just at $525—below $535 but off the session lows—the bulls managed to hold the line after briefly losing control. At one point, SPY dropped all the way to $510 before finding support, signaling the bears are still very much in play. Friday could go either way. Bulls will regain stronger footing above $535, but they won’t fully reclaim control unless $585 is surpassed. Conversely, a break below $520 could pave the way for a test of $500—and potentially lower. Below $500, there's limited support to prevent a retest of recent lows. Meanwhile, resistance remains heavy above $535, likely capping any upside in the near term. Several of our systematic, automated strategies remain mostly inactive due to the extreme volatility, currently engaging less than 1% of our book. Tariffs and inflation continue to dominate the narrative and will remain the primary market drivers for the next 90 days—or until further guidance comes from the White House. The VIX closed at 40, and as we’ve noted previously, readings above 35 are problematic for the bulls. The broader bearish trend channel, which began with the December highs, remains intact. Price is now trading mid-channel. While the channel allows for movement in both directions, we expect price action to stay largely contained within it in the near term, with meaningful resistance near $565 and support at $475. Momentum has become less directional—both bulls and bears have a credible case going into Friday. 

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI is currently in a Ranging Market State, with price in the upper end of the range. The range is average indicating a confused market which can easily move in either direction. Overnight, price climbed slightly but at the European open at 4 am, the market sold off and extended targets stopped printing indicating the end of the bull move from Wednesday. The MSI initially held price at support at $533 but just after the open, the market fell and saw the MSI rescale lower several times to a Bearish Trending Market State. There were extended targets printing below which indicated the herd was participating in the sell off. SPY moved to major support at $510 where extended targets stopped printing. A V bottom emerged and price cut the selloff in half and by 1 pm, the MSI had rescaled to a ranging state which contained price into the close. At present, MSI support is marked at $517.61, with resistance at $528.05.
Key Levels and Market Movements:
On Wednesday, we noted: “With China tariffs still slated to rise to 125%, there are significant macro risks looming over both the market and the global economy.” We also warned that “a break below $535 would likely invite the bears back in, with potential to retrace a large portion of today’s rally.” And finally: “For Thursday, be cautious around CPI at 8:30 AM. Traps are common after these releases, and we’ll be watching for signs of a failed breakdown or breakout.” Once again, we had a clear plan for the day—knowing what to look for, where, and when. At the open, after a failed breakout post-CPI (the trap we anticipated), price failed to hold above $535 and lacked extended targets. That gave us the setup: we took a short right at $535, targeting the MSI support at $522.50. By 11:38 AM, our first target was hit. With stops moved to breakeven and price trading well below our premarket model levels, we let the MSI guide our next move. Fortunately, the MSI delivered—rapidly rescaling lower and printing extended downside targets. We already knew $510 was a major level, and when SPY hit it, the MSI stopped rescaling and stopped printing extended targets. That was our signal: we exited the short and reversed long on a textbook failed breakdown. The long developed quickly from $512. We took our first target at $517.50, moved the stop to breakeven, and aimed for a second target near $525—premarket support turned resistance. We booked that second target just below that level and let a 10% runner ride. Price didn’t cooperate, dropping sharply and hitting our stop at 1 PM. We briefly considered another long but opted to sit out—MSI had shifted to a ranging state, and we avoid trading in that environment. One monster short and a solid two-target long was enough to call it a day. This week continues to be extreme, delivering profits that usually take days—or even weeks—to accumulate. Once again, the key was simple: have a solid plan, follow it with discipline, and let the MSI and model levels guide each decision. The MSI shows who’s in control, when that control shifts, and where key actionable levels lie—empowering precise entries and exits. When paired with our model levels and daily strategy, it keeps us aligned with dominant market forces. MSI consistently delivers this level of precision—helping traders avoid danger, stay in sync with momentum, and take profits with confidence. We strongly recommend incorporating the MSI into your trading toolkit. Combined with a structured plan, it becomes a powerful engine for long-term performance.
Trading Strategy Based on MSI:
Friday brings a fair amount of economic news, but like today, the tariff situation remains the dominant market mover. The market continues to react sharply to developments out of the White House, and as we noted yesterday, a 90-day pause is not the end of tariffs. Today’s sell-off was fairly typical after a massive 10% rally—historically, the two days following such a move tend to be bearish. Still, the bulls defended the key $510 level, preventing a deeper breakdown. With the MSI in a ranging state, anything can happen Friday. In this kind of environment, it’s nearly impossible to have a strong lean, so once again, we recommend trading what you see using the tools at your disposal. That said, here’s what to watch for: If bulls can defend $520 and consolidate near $535, a break above $535 could lead to a slow grind toward $540 and beyond. A failure at $520 likely brings a retest of $510—and if that level breaks, SPY may revisit the week’s lows near $480. Control remains split between bulls and bears, with perhaps a slight edge to the bears heading into Friday. External forces remain the primary driver, so it's critical not to rely solely on model levels. Instead, stay responsive and let the market reveal its hand. Fortunately, the MSI updates in real time, providing actionable intraday insights to help you stay aligned with the market's shifting dynamics. Learn to use it well, and you’ll never be caught trading off an outdated plan. Two-way trading is advisable on Friday—ideally from failed breakouts and failed breakdowns. Avoid fighting extended targets or trading against a wide MSI. Use the tools: The Premarket Report blends fresh data with AI-driven insights for strategic prep. The MSI reveals real-time structure, momentum shifts, and key inflection points. Our model levels highlight high-probability targets and entry zones. Be nimble. Adapt. Trade what you see—not what you think. Notably, the chance of SPY dropping to $450 is now back to 30%—a sharp reminder of how quickly conditions can change. As volatility cools, expect SPY’s pace to slow and the MSI range to return to more typical widths—possibly starting tomorrow. Keep a close eye on the MSI. It provides critical, real-time visibility into who’s in control and where key momentum zones lie. Respect extended targets—they reflect strong conviction and herd-driven price action. Used in tandem with our model levels, the MSI helps you stay on the right side of the trade. If you're not already using these tools, now is the time. Connect with your rep—these are game-changers in navigating environments like this.

Dealer Positioning Analysis

Summary of Current Dealer Positioning:
Dealers are selling $541 to $570 and higher strike Calls while also buying $525 to $540 Calls indicating the Dealers desire to participate in any rally on Friday to as high as $545. To the downside Dealers are buying $524 to $445 and lower strike Puts in a 2:1 ratio to the Calls they are buying/selling, implying a neutral to slightly bearish posture for Friday. Positioning has gotten back to a profile more typical of the market and as such, we believe utilizing this data for tomorrow is prudent. This positioning has changed from bullish to neutral/slightly bearish.   
Looking Ahead to Next Thursday (Friday is a holiday):
Dealers are selling $565 to $580 and higher strike Calls while also buying $525 to $564 Calls in huge sizes indicating the Dealers strong desire to participate in a rally next week. Dealers are heavily long Calls indicating a firm belief the market will move higher next week. To the downside, Dealers are buying Puts from $524 to $425 and lower in a 1:2 ratio to the Calls they’re buying/selling. This reflects a strongly bullish outlook for next week. Dealer positioning has changed from bullish to more bullish. While Dealers still hold large amounts of downside protection, they appear positioned for a major rally next week. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly, and tracking them is essential for staying ahead of shifting market sentiment.

Recommendation for Traders

Traders should remain cautious as we close out the week, with Friday bringing more economic data and markets still reeling from Wednesday’s tariff shock. With SPY below $535, the focus now shifts to downside levels, particularly $525 and $520. Look for failed breakouts near $530 or $535 to initiate short trades targeting $520 and $510. Longs should only be considered if price reclaims $535 with strength, targeting $540 and $545 or from much lower support levels. Given the VIX at 40, risk remains elevated—reduce position size, keep stop-losses wider, and avoid chasing any moves. Capital preservation should be a top priority. Stay nimble, trade with the trend, and wait for setups that align with MSI and model levels. Always manage risk proactively, especially around macro events. Be sure to review our premarket analysis before 9:00 AM ET for the latest signals and strategic insights.

Good luck and good trading!