Daily Commentary: April 11, 2025

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News Is Driving the Action

Posted by Pete Stolcers on April 11
www.oneoption.com

The market is focusing on the tariff announcements and that news is fluid.

PRE-OPEN MARKET COMMENTS FRIDAY – The focus has completely shifted from economic releases to tariffs. The market has been in a flux this week and that will continue today. The tariffs were imposed and the reciprocal component was postponed 90 days (except for China). Retaliatory tariffs have also been imposed by China and the news is fluid.

The House passed the budget bill and it is likely to clear the Senate. This news had little to no market impact. This morning major banks have reported earnings and the early reaction has been volatile (first higher and then lower). More earnings releases are scheduled next week. These are the larger companies that will report next week. AA, ABT, ALLY, APLD, ASML, AXP, BAC, BX, C, GS, JNJ, KEY, KMI, LVS, RCAT, TFC, TSM, UAL, UNH, USB.

The economic calendar is light so earnings and tariff news will drive the action next week.

Swing traders should sell OTM naked puts on strong stocks they would like to buy. This strategy takes advantage of elevated option implied volatilities and you can sell them so far out of the money that this is really a neutral strategy. Stay with short term options and make sure they expire before earnings announcements. This strategy can yield 5-10% returns in two weeks and it is the only swing trading I would advocate. Make sure you hold enough margin in reserve so that you can buy the stock.

From a day trading standpoint you can expect wild swings. With so much volatility, the first move of the day is likely to be wimpy. Neither side will have a big advantage and the move in that first direction will be strained. Watch for mixed overlapping candles with lots of retracement and long tails/wicks. If you get that, start searching for stocks that are moving in the opposite direction. When the first market move stalls, these stocks will provide you with the best opportunity. If you don’t have a good read on the market… do nothing.

Support is at $517.50 and resistance is at $530.

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