Russell 2000: Looking Past the Short-term VolatilityCME: Micro E-Mini Russell 2000 Index Futures ( CME_MINI:M2K1! )
On Saturday, May 3rd, Warren Buffett took the center stage of the Berkshire Hathaway annual shareholder meeting. “What has happened in the last 30, 45 days … is really nothing,” declared the “Oracle of Omaha”.
Buffett brushed off recent stock market volatility that has rattled investors over the past weeks. “This has not been a dramatic bear market or anything of the sort,” he said.
In April, U.S. stock market took a deep dive after the start of Reciprocal Tariff against all U.S. trading partners. A few days later, we witnessed spectacular rally with a record daily gain, as a 90-day tariff pause was announced. On May 2nd, the S&P 500 completed a 9-day winning streak, the longest in 20 years.
After a month-long rollercoaster ride, the U.S. stock market is back to where it started. If an investor bought stocks in the beginning of April and then slept for the whole month, he wakes up today and may not even notice any changes in his portfolio.
Sunny Days ahead after the Storm
I concur with Buffet’s assessment that the U.S. economy is fundamentally strong. The supply chain disruptions are painful and will lead to product shortage, higher prices and layoffs in affected industries. However, trade conflicts will be resolved in a few months. The U.S. will be in a strengthening position, making its economy more sustainable.
The U.S. economy contracted 0.3% in Q1 2025, the first negative reading since 2022, according to the Commerce Department. However, the underlying data is much better if you look past the headline.
The formula: GDP = C + I + G + (X - M), where:
• C is consumer spending; I is investment by private business
• G is government spending; (X-M) is the net of exports minus imports
The key driver of the negative GDP is Imports. US buyers front-run the tariffs with massive orders, resulting in a 41.3% increase in imports. We also see a 21.9% gain in investment, primarily the result of US businesses building up inventory with imported goods.
• Imports and Investment contribute -4.83% and +3.6% to Q1 GDP, respectively. Both are one-time events and should not be taken as a long-term trend.
• Consumer spending grew 1.8% in Q1, contributing to 1.21% of GDP. Government spending contracted 1.4% in Q1, contributing to -0.25% of GDP.
Real Story: Q1 constant dollar GDP is +3.5%. By using a price deflator of 3.7%, the government reports a -0.3% “Real GDP at seasonally adjusted annual rates.”
Separately, the Bureau of Labor Statistics (“BLS”) reported that total nonfarm payroll employment increased by 177,000 in April, beating market expectations. The April unemployment rate was 4.2%, in line with expectations.
The above data supports my assessment of a solid U.S. economy. Once we walk past the tariff fear, the stock market will likely resume its growth.
Small Firms May Benefit More from New Trade Policies
A global supply chain helps corporate giants source from the most efficient and lowest cost suppliers. Small businesses may not be so lucky. Take the US textile industry as an example, the BLS data shows that 80% of domestic jobs have been lost since 2000.
The "de minimis" exemption is an import loophole that allows overseas packages under $800 to come into the U.S. duty-free. According to BLS data, e-commerce giants like Amazon, Shein and Temu source 80-90% of their products from overseas.
Closing the "de minimis" loophole and enacting fairer trade deals will help domestic manufacturers. By shielding from low-cost import dumping, a revitalized US manufacturing industry may not be far fetching.
Of the four major US market index, Russell 2000 performed the worst, flat in the last twelve months. Based on my analysis above, the Small Cap Russell index may have a better growth outlook compared to blue-chip indices.
Trade Setup with CME Micro E-Mini Russell 2000 Index Futures
Traders who take a bullish view in Small Cap could buy the Micro Russell Futures (M2K).
M2K contracts have a notional value of $5 times the index value. With Friday settlement price of $2042.70, each September contract (M2KU5) has a notional value of $10,213.5. Buying or selling one contract requires an initial margin of $932 at the time of writing.
The reason for selecting the September contract rather than the more liquid June contract is the time it takes to negotiate trade deals. While some trading partners may reach agreement within the 90-day window, others may not.
Micro Russell futures (M2K, $5) contracts tap into the deep liquidity of E-Mini Russell futures contracts (RTY, $50). As of last Friday, RTY has an open interest (OI) of 457,283 contracts, while the OI for M2K is 41,563, according to data from CME Group.
The risk of long Russell futures is a decline in the index. To hedge against the downside risk, a trader could set up a stop-loss in his buy order.
Hypothetically, a trader enters a buy order of M2KU5 at $2050 with a stoploss at $1950.
• If the Russell goes up 10% to 2,255, the trade will gain $1,025 (= (2255-2050) * 5). The theoretical return is 110% (= 1025/932). This is 10 times bigger than the gain in the underlying index, thanks to the leverage built into the futures contracts
• If the Russell falls 10% to 1,845, the maximum loss with be $500 (= (2050-1950) * 5). This is less than the initial margin of $932 and the trader will not face a margin call. The loss is limited even if your view is incorrect, thanks to the stoploss feature
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Tariffwar
Gold - All eyes on Wednesday 08 May - FED🟡 Gold Traders: Nothing Matters Until Wednesday! ⏳💤
Hey traders! 👋
This week, all eyes are on Wednesday... and everything before that? Mostly noise.
Let me break it down for you. 👇
📊 Technical Outlook
Gold is chilling above a key resistance level right now.
Trendlines suggest we won’t see any major moves before Wednesday unless big news drops. 📰
🕐 Asian session is kicking things off above resistance.
If bulls show up there, we could break Trendline 1 (Image below) and head towards the $3300 🎯 target.
📉 RSI across multiple timeframes? Pretty neutral.
If Asia trades flat or slightly bearish, gold might range between $3210–$3250.
Break below $3201, and things could get shaky... but the European session might push us back above that support.
U.S. session on Monday? Likely a sideways snoozefest 😴 (unless surprise news hits).
🎯 Trade Setup (Mon–Wed)
I’m looking to play the range between:
$3261 (Trendline 2) 🔼 and $3169 (Trendline 4) 🔽
That’s a comfy $90 window I’m aiming to trade before Wednesday's fireworks. 🚀
🔮 After Wednesday – The FED Factor 💣
Here’s the real catalyst:
Wednesday, May 7 at 2:00 PM EST – FOMC Rate Decision
If the FED cuts rates (not likely, but possible under pressure), gold could tank hard. 💥
I’m talking a potential drop to $3150 or lower 🕳️📉
That’d be a -$90+ move easy.
FED has been holding the line 💪, resisting pressure (especially from Trump back in the day), but if the economy flashes red, that rate cut might come sooner than expected.
🧠 Final Thoughts
FED paused hikes, but left the door open for 3 rate cuts this year.
Until we get more clarity, no strong bullish signals on gold.
My bias stays: Bearish unless proven otherwise. 🐻💬
Stay sharp out there, and watch those sessions. Wednesday’s the real deal! 💼📉
And last but not least, look at this and let us know what you think about please:
Some would say its impossible but as we know, gold can do everything!
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This is just my personal market idea and not financial advice! 📢 Trading gold and other financial instruments carries risks – only invest what you can afford to lose. Always do your own analysis, use solid risk management, and trade responsibly.
Good luck and safe trading! 🚀📊
Possible H&S Forming – It’s All About the News NowOANDA:XAUUSD
📉 Watching closely: Possible Head and Shoulders formation developing on the 4H and 1H charts
As of April 24, 2025, Gold (XAU/USD) is forming a potential Head and Shoulders pattern on the shorter timeframes (4H and 1H), which could indicate a reversal setup. While multiple scenarios are still in play, the price action around the $3368 level will be crucial.
If price fails to break above this resistance in the near term, it could suggest weak bullish momentum and open the door for a pullback toward and possibly below the neckline around $3250 .
🔔 Key Economic Events – April 24
08:30 EDT – Durable Goods Orders MoM
Forecast: +2.0%
Personal outlook: Numbers might come in weaker than forecasted.
Durable goods orders are a solid gauge of industrial demand. Weaker-than-expected numbers would likely weaken the USD and could offer some upside pressure on Gold.
10:00 EDT – Existing Home Sales
Forecast: Lower than previous.
As a key barometer of consumer confidence and economic stability, lower-than-expected figures could also put pressure on the USD, potentially providing Gold a short-term bullish impulse.
📊 Potential Scenarios
Scenario 1 – Bullish Breakout
Weak economic data → USD weakens → Gold spikes above $3400
If both data points disappoint, we could see a rally in Gold, possibly breaking the resistance and invalidating the H&S pattern.
Scenario 2 – Bearish Breakdown (Preferred H&S Scenario)
Strong data → USD strengthens → Gold falls below $3200
While less likely, if economic data comes in stronger than forecasted, Gold could see a significant drop, forming the right shoulder and breaking the neckline – confirming the Head & Shoulders reversal.
Scenario 3 – Sideways Movement
Neutral data + Tariff talks in focus
In the absence of impactful data or if figures come in as expected, Gold might consolidate sideways. Ongoing developments around US-China tariff negotiations could dominate sentiment, delaying or nullifying the H&S pattern entirely.
📉 Market Sentiment Snapshot
US stocks are rallying on optimism around tariff reductions
Trump administration signaling potential easing of China tariffs
➡️ Gold under pressure as risk-on sentiment rises
📍 Conclusion
Keep an eye on the $3368 level and $3250 neckline. Short-term moves will likely be dictated by today’s economic releases and the evolving trade narrative. A confirmed break below the neckline would validate the bearish H&S scenario with potential downside toward $3200 and below.
👉 Stay nimble and trade the reaction, not just the forecast.
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This is just my personal market idea and not financial advice! 📢 Trading gold and other financial instruments carries risks – only invest what you can afford to lose. Always do your own analysis, use solid risk management, and trade responsibly.
Good luck and safe trading! 🚀📊
Spring Loaded Wedge? Let the setup come to you! $SPXLowkey top watch for the next few weeks!
It was a chop zone last week = consolidation? Now zooming out, it’s looking like a loaded wedge/flag forming. A lot of bearish sentiment, tariff talks and unknown lately but this is looking mighty interesting of a formation. Volume also slowly declining, wondering if we’re setting up for once a decision/mutual agreement is made with US, China + others involved.
Green ray is my ENTRY: 5372.44
*Also eyeing 5329.66*
- For potential upside. We have a few gams above to also fill and can magnet upwards if we get news, volume etc.
Looking for the banger* here - of course, things are still brewing. Note this is the HOURLY timeframe. Wait for the setup to come!
Let me know your thoughts! Appreciate any insight. Do your DD! #NFA AMEX:SPY SP:SPX
Gold Price Rollercoaster: Is the Rally Just Beginning?The gold price has had a pretty crazy six days, jumping from 3,014 USD on April 9, 2025, to 3,357 USD on April 17 – that’s a solid 11%+ gain. So, what’s going on now? Is the gold rally over, or could we see even more upside? Let’s break it down.
🔥 What’s driving the gold price?
The big reason behind the recent surge is the trade war between the US and China. Trump has slapped new tariffs on imports from China, Mexico, and Canada, which has shaken things up in the markets. The Fed has also warned that these tariffs are bigger than expected, and could slow down growth and increase inflation.
When things get uncertain, investors tend to rush to safe havens like gold, and that’s exactly what’s happening right now. The demand for gold is up, and so is the price.
📉 What does the ECB rate cut mean?
The European Central Bank (ECB) has lowered interest rates by 0.25% today, dropping from 4.5% to 4.25%. They’re trying to help the economy out and ease inflation.
Lower rates mean fixed-income investments aren’t as attractive, which makes gold a better option. But, the US Fed has made it clear they won’t cut rates before June 2025, which could strengthen the US dollar and make gold a little less appealing.
🕊️ What if there’s a trade deal?
Now, imagine there’s a breakthrough – a trade deal, fairer tariffs, and everyone’s calming down. That could change things for gold:
📉 Less risk = less demand for gold: If things chill out, less capital will flow into gold.
💵 Stronger Dollar?: A trade deal could make the US dollar stronger, which isn’t necessarily great for gold. But Trump has made it clear that he doesn't want a strong dollar, since it makes US goods less competitive abroad. Even if the dollar does strengthen, it might put pressure on gold since it becomes more expensive for people using other currencies.
🔁 Money shifts: If things get calmer, investors might move away from gold and back into stocks or bonds for better returns.
So, a deal could definitely slow down or even end this gold rally.
🧭 What does this mean for investors?
Daytraders
For day traders, the current ups and downs can offer some good opportunities, but they also come with risks. The markets are super sensitive to news about the trade war and rate cuts. Quick gains are possible, but you’ve got to be careful. If a trade deal happens, expect the classic “Sell the News” scenario where the market cools off.
Medium-Term Investors (1 Month)
Over the next few weeks, we’ll see if more trade war news or central bank decisions impact the gold price. The rally could keep going, but nothing is guaranteed. If you’re in it for the medium-term, keep your positions flexible and manage risk closely. A trade deal could be bad news for gold, though.
Long-Term Investors
Long-term, gold is still a great way to hedge against inflation and geopolitical risks. The current trends could help gold prices, but keep in mind there could be some ups and downs. If the price drops due to a trade deal, it might actually be a good opportunity to buy.
📊 The Bottom Line
Gold has been on a hot streak lately, driven by the trade war and central bank moves. Whether this rally continues or cools down depends on what happens next. A trade deal could bring a correction. So, keep an eye on things and adjust your strategy accordingly.
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This is just my personal market idea and not financial advice! 📢 Trading gold and other financial instruments carries risks – only invest what you can afford to lose. Always do your own analysis, use solid risk management, and trade responsibly.
Good luck and safe trading! 🚀📊
Netflix (NFLX) – A Safe Haven Amid Tariff UncertaintyKey Supporting Arguments
Amidst the unpredictability of Donald Trump's tariff policies, Netflix might serve as a defensive play.
Positive consumer sentiment, a surge in subscriber growth, and strategic hikes in subscription prices are poised to power robust results for the first quarter of fiscal year 2025.
Investment Thesis
Netflix (NFLX) is a global leader in video streaming, offering a vast library of original and licensed content to subscribers worldwide. With over 95% of its revenue stream coming from subscriptions, the company secures a solid foundation against the whims of market volatility. NFLX’s nascent foray into advertising contributes a mere 3% to its revenue, ensuring that any tremors in the macroeconomic climate have a minimal ripple effect.
Netflix's business model, anchored in subscription revenue and expansive geographic diversification, shields the company from the whims of unpredictable tariff policies. Amidst the relentless cycle of tariffs being slapped on and lifted from a variety of products and the growing tide of protectionism, streaming platforms such as Netflix, which thrive on subscription-based models, emerge as devensive assets. This is largely because they steer clear of the tumultuous world of physical goods production, importation, and exportation. The sustainability of the company’s streaming empire is anchored in its formidable user engagement—clocking in at around 2 hours per household daily—paired with historically low subscriber churn and entertainment value that punches well above its price tag. These elements collectively mitigate NFLX’s risk profile in the face of a potential recession. While advertising revenue may take a hit if trade tensions intensify and trigger an economic downturn, it is worth noting that ads only contribute to about 3% of Netflix's total revenue. Despite its worldwide footprint, the company still rakes in a hefty slice of its revenue—around 40-45%—from the U.S. market, offering a protective buffer against possible international sanctions or restrictions. Meanwhile, its strategic geographic diversification across Europe, Latin America, Asia, and the Middle East not only mitigates risks but also fortifies the sustainability of its business model.
Netflix is poised to potentially exceed expectations in its Q1 2025 earnings report. In Q4 2024, the company shattered expectations by pulling in a recordbreaking 19 million new users, a surge we anticipate will roll into 2025, powered by its rich and diverse content lineup. By the year's end, Netflix strategically hiked prices in the U.S. and UK, a move poised to bolster its Q1 2025 revenue. With a bold target of 29% growth for 2025, the company is banking on buoyant consumer spending and these subscription price upticks to hit the mark. Netflix projects a free cash flow of no less than $8 billion, creating a strategic opportunity for potential share buybacks.
Our target price for NFLX over the next two months is pegged at $1,080, paired with a "Buy" recommendation. We suggest setting a stop-loss at $880.
Spotify (SPOT) – Sustainable Business Model Amid Tariff WarsKey Supporting Arguments
Spotify’s business model is resilient enough to rising tariff barriers between countries and economic downturns
Spotify and other music streaming platforms are undercapitalized and may demonstrate substantial growth in 2025, driven by increasing subscription prices.
Investment Thesis
Spotify (SPOT) stands as the world’s leading global audio streaming platform, boasting over 600 million active users, around 265 millions of whom are paying subscribers. The company’s primary revenue stream is derived from premium subscriptions, which constitute approximately 88% of its total revenue, with advertising revenue comprising the remaining 12%. This model offers the company relative stability amidst ongoing tariff tensions.
Amidst global economic instability and the threat of escalating trade wars, Spotify emerges as a safe haven for investors. Spotify’s audio streaming platform is not reliant on the supply of physical goods, rendering it immune to tariff barriers. The high entertainment value, the ingrained habit of daily usage, and the superior quality of the platform ensure a strong subscriber base, even during times of economic uncertainty. 88% of Spotify’s revenue is derived from paid subscribers, while advertising revenue accounts for only about 12%. This revenue structure makes the company more resilient to downturns in consumer demand and reduced advertising budgets. Approximately 40% of Spotify’s revenue is generated in the U.S. and 10% in the UK, with the remainder coming from other markets worldwide. This geographic diversification mitigates vulnerability to localized economic shocks.
The music streaming sector is undercapitalized. This industry is undergoing transformation. Initially, competition among music streaming platforms was centered on mass user acquisition, often keeping prices low to attract listeners away from piracy services. However, beginning in 2022 and through 2023, a wave of price increases was initiated by all major industry players, including Spotify, Apple, Amazon, and YouTube. As users have grown accustomed to paid subscriptions and their loyalty has increased due to enhanced user experiences, the cost of switching between platforms has risen substantially. This has empowered streaming services, particularly Spotify, to raise prices without experiencing significant audience loss. We anticipate that subscription price increases will be a primary driver of the company’s revenue and margin in 2025.
Our two-month price target for the SPOT stock is $650, with a “buy” rating. We recommend setting a stop-loss order at $500.
Tata Motors at ₹600: Support Zone in Focus...
Tata Motors at Key Technical Support: A Long-Term Buying Opportunity..?
Tata Motors is currently trading near the ₹600 level, which marks a significant technical support zone. This level is important not only because of historical price action but also because it aligns with the 0.5 Fibonacci retracement level of the broader uptrend seen in recent months.
The ₹600 mark has acted as a strong support on the monthly chart, suggesting a potential reversal point for long-term investors looking for value entry. From a purely technical perspective, this level could provide a solid foundation for a possible bounce or even a continuation of the longer-term bullish trend.
However, it is important to note that while technical indicators may suggest an attractive entry point, Tata Motors remains subject to various fundamental factors that could drive volatility in the short to medium term. These include:
- JLR (Jaguar Land Rover) Sales Data
- Quarterly Earnings Results
- Global Tariff and Trade Policy News
These elements can significantly impact investor sentiment and stock performance, sometimes overriding technical signals.
Disclaimer: This analysis is based solely on technical chart patterns and should not be considered financial advice. Market conditions can change rapidly, and it’s crucial to conduct your research and consider fundamental factors before making any investment decisions.
$SPX: Rising WedgeSPX looking a bit tight, possibly a rising wedge?
Tariff news has been such a wash up. Tariffs on/Tariffs off. A lot of moving pieces and indecision. If the news is false regarding electronics not included, then markets can possibly take a downturn.
Green ray is my entry, I’m looking for a short. But tbh, any one word “positive” said can move things up and fill the gap above.
I’m going to bias short. Let’s see what the week brings.
SP:SPX AMEX:SPY NASDAQ:TSLA NASDAQ:NVDA
Ethereum Surges Past Resistance as Trump Halts Tariff Plans..!🚨 **Market Update** 🚨
President Donald Trump has announced a 90-day pause on the full effect of new tariffs for certain countries, and the markets are reacting strongly! 📈 Both the stock and crypto markets are surging as a result.
Right now, Ethereum is testing the $1600 resistance level on the 1-hour timeframe. 💥 Our trading strategy is to let it break the resistance and sustain above it, then look for a solid entry on the pullback.
Stay tuned and trade wisely! 🚀💰
Nifty recovers from lows of the day. But not out of danger yet.Nifty as expected suffered heavy losses due to Trump Tariff Tornado which has engulfed the global markets. The good thing which is the silver lining in the cloud was that it recovered from the lows of the day by a lot. The lowest point of today or perhaps the year 2025 so far was 21743 and we closed the day at 22161. Which is about 418 points. However we are not out of the woods yet. We will hopefully see bottom formation later during this week or the next if this lowest point is already not the bottom. The support levels for Nifty remain at 21743, 21289, 20790 and 20320. Resistance for Nifty will be at 22266, 22711, 23083 and 23384. Above 23384 closing Nifty will be back to the bulls territory and we can hope for a recovery towards 24K first and then 25K.
As of now the ball is still in Trump's court as the world sizzles with his Whims and fancies. China is planning a stimulus package for its industry and High level cabinet meeting is going on in India as I write this to counter the effects of Trump Tariff and swift recovery of our economy in addition to minimising the effect of damage.
The best strategy is to wait out the Trump Storm reassess the situation once bottom is formed. Those who have liquidity this is a good oppertunity to go long after bottom fishing.
Disclaimer: The above information is provided for educational purpose, analysis and paper trading only. Please don't treat this as a buy or sell recommendation for the stock or index. The Techno-Funda analysis is based on data that is more than 3 months old. Supports and Resistances are determined by historic past peaks and Valley in the chart. Many other indicators and patterns like EMA, RSI, MACD, Volumes, Fibonacci, parallel channel etc. use historic data which is 3 months or older cyclical points. There is no guarantee they will work in future as markets are highly volatile and swings in prices are also due to macro and micro factors based on actions taken by the company as well as region and global events. Equity investment is subject to risks. I or my clients or family members might have positions in the stocks that we mention in our educational posts. We will not be responsible for any Profit or loss that may occur due to any financial decision taken based on any data provided in this message. Do consult your investment advisor before taking any financial decisions. Stop losses should be an important part of any investment in equity.
Trump Tariffs send global Markets into free fall. Trump Tariff announcements has sent the global markets into free fall. The reaction has sent global markets into knee jerk reaction. Global trade will axis will realign because of these actions of US. As per the analysis of many experts the disadvantages to India are limited. There are opportunities galore in sectors like Pharma and Textile etc. The support levels for Nifty currently are at 22338, 21983, 21289, 20095 and finally 19864. The resistances for Nifty are 23037, 23266 and 23894. Long term Resistance for Nifty remain at 24831 and 25K levels.
Short term outlook for Nifty is weak. In the medium term Nifty can remain range bound and Long term outlook for Nifty still remains strong. Investors with Long term outlook can search for Bottom Fishing opportunities in Blue chip stocks which are available at good prices.
Focus should be on India centric themes where products and companies are less dependent on exports specially to US. Having said that it can be a blessing in disguise for sectors like Pharma and Textile. If Indian leadership can turn this obstacle into oppertunity by taking the right steps it can be a curse in disguise. Investors can also look at collecting some ETFs international as well as local as a long term investment.
In cricket matches sometimes losing a toss can be a blessing in disguise this is something like that.
Disclaimer: The above information is provided for educational purpose, analysis and paper trading only. Please don't treat this as a buy or sell recommendation for the stock or index. The Techno-Funda analysis is based on data that is more than 3 months old. Supports and Resistances are determined by historic past peaks and Valley in the chart. Many other indicators and patterns like EMA, RSI, MACD, Volumes, Fibonacci, parallel channel etc. use historic data which is 3 months or older cyclical points. There is no guarantee they will work in future as markets are highly volatile and swings in prices are also due to macro and micro factors based on actions taken by the company as well as region and global events. Equity investment is subject to risks. I or my clients or family members might have positions in the stocks that we mention in our educational posts. We will not be responsible for any Profit or loss that may occur due to any financial decision taken based on any data provided in this message. Do consult your investment advisor before taking any financial decisions. Stop losses should be an important part of any investment in equity.