Market Overview - End of Q1 2025

Market Environment

• Bullish Start: Market started the year bullish holding above the year-to-date anchor.
• All-Time High Followed By Decline: Achieved new all-time high but followed by a rapid decline to new lows.
• Current Stance: Market has undercut previous lows (SPY) and bounced higher.

Trading Strategy

• Short Selling Strategy: Caution advised against setting stops under new lows; considered amateurish.
• Bounce Opportunities: Buying with stops under key levels can capitalize on market bounces.

ETFs and Market Analysis

• Key ETFs:
  • SPY, NASDAQ, Semiconductors, Russell 2000 all broke below prior lows before buyers emerged.
  • Russell 2000: Touched anchor from 2021 high, significant for future movements.
• Moving Averages:
  • Current decline seen below 5, 20, 50, and 200-day moving averages signals caution.

Market Trend

• Bounce vs. Reversal: Current situation seen more as a bounce rather than a reversal due to declining moving averages.
• Possible Retracement Levels: Discussion around retracing to the 61.8% level and monitoring key levels.

Specific Market Segments

• Semiconductors & Biotechs:
  • Semiconductors undercut prior lows but potential for bounce discussed.
  • Biotechs considered weak with bounces potentially acting as resistance.
• Financials:
  • Showed strength, breaking above a 5-day moving average.
  • Potential for further declines if support breaks.
• Energy Sector:
  • Oil prices surged, signaling possible larger movements.

Individual Stocks

• Tesla & Palantir:
  • Tesla: Gapped down but rebounded above daily VWAP. Neutral stance due to declining averages.
  • Palantir: Broke support levels; potential for further declines.
• NVIDIA:
  • Undercut longer-term anchors and bounced as expected.
  • Reinforcement that setting stops below obvious lows is unwise.

Strategic Insights

• Day Trading Opportunities: There are day trading opportunities, but caution advised with declining averages.
• Skepticism in Rallies: Continual skepticism towards rallies below declining averages.
• Trading Discipline: Emphasis on disciplined trading practices and avoiding shorts after significant declines.