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Dogpile

ES Trading For 9/17 + Rest of Week

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We enter Monday in an interesting position.

 

Fridays gap down at the open appeared to begin a new 'down auction' following the multi-day, low-volume 'up auction that completed on Thursday. When a new auction begins, we look for signs of continuation to confirm this (volume and profile shape).

 

Effectively, the break away from 1498.00 did carry nicely but the entire move happened overnight. The market then rejected this downside move by forming an 'excess low' this morning. Thus, we began an 'intraday up auction' (morning low to afternoon high). However, this up auction was weak as volume was very poor and the profile shape shows that new buying and short-covering was being offset by patient-sellers.

 

The true profile structure is probably best seen in combining the last 2 days (Thursday & Friday). If you combine both days into one volume distribution, it looks like a very 'normal distribution' -- with a selling tail above and a buying tail below.

 

A Break from a 'normal' distribution is generally a 'go-with' -- so will have to be flexible for Monday.

 

The market has been creeping higher on low volume. Generally this type of behavior ends in a buying climax as late-to-the-party investors finally give up and enter at bad prices. If this were to happen, this would then set the market up for a good flush the other way. But that is looking multiple days out.

 

For now, I have no real bias for Monday and will likely be a patient trader until something more interesting sets-up.

 

Attached is the profile shape for Friday -- I will work on something more interesting on Sunday. Hopefully, some others can join in and we can collaborate on some analysis and potential strategy for a week that will include;

 

brokerage earnings reports

a fed rate cut

options expiration

 

this should make for a crazy week...

5aa70e01c15b8_Sep142007ES.thumb.png.f66f3fa184d863b0a6a4036271fe7176.png

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Dogpile, do you not bother with the TPO/lettered chart MP concept at all?

You proxy that through traditional TA?

 

I got sick of trying to get into the nuance of the TPO graph last night in Mind Over Markets and just read the last chapter.

I'm half through the book and the information overload is at the point that if you posted a volume distribution of a bracketed market, I would have no clue.

 

I would love to hear a more conceptual post on how you use MP. I'm more interested in the core concepts I soppose then the details, thats just how I learn.

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<<do you not bother with the TPO/lettered chart MP concept at all?

You proxy that through traditional TA?>>

 

I did it by hand for months and now feel like I can read it just fine through a chart and a volume distribution. I feel like TA is just more intuitive than looking at a bunch of letters.

 

I couldn't make it through Mind Over Markets either. But if you can read the first 100 pages or so - then read Markets In Profile. Markets In Profile is a pretty easy read, IMO.

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link to Jim Daltons weekly comments:

 

http://www.marketsinprofile.com/seminars/II-091607.html

 

"What we are showing is that since the excess low, the market structure resembles the letter “Pâ€Â; if you combined all the daily profiles into a single long-term profile, this is the structure (shape) you would observe. The interpretation is that shorts were buying to cover (old business) versus new money longs entering the market (new business), which would likely cause the structure (long-term profile) to become elongated. We think that there were numerous shorts that expected the market to retest the excess lows and the failure to accomplish the test began to try the patience of the shorts, who then began to cover. "

 

"For the week beginning 9-16-07.

 

Earlier I asked you to remember the 1.4 billion volume number from Friday’s downward auction. None of the up days last week equaled the low volume seen on Friday. This does not leave the market with a strong underlying support structure as we await Tuesday’s interest rate announcement from the Federal Reserve.

 

As we finished the week at the top of the trading range (there are two ranges, we are at the top of the lower range), this is the main reference to begin the week. Bonds have backed off a little in price in case there is a surprise in the announcement; however, stocks have continued to trade as if there is no risk. Market Logic would question stocks prudence."

 

---------

 

Interpretation: Dalton seems to be favoring short-side here but not with conviction.

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Market gapped down and attempted a further downside move today but eventually ran out gas. We ended with yet another day of miserable volume. The profile shape/volume distribution was yet again fat and symmetrical -- indicating the down auction has no real conviction. PVP, VWAP and closing price all ended relatively close together, singalling a state of 'balance'. Note that we did build lower value for the second consecutive day.

 

LEH earnings in pre-market tomorrow. Tomorrow is another 'go-with' given the symmetrical profile and lack of volume today. I prefer the short-side still but will likely join in on an initial break higher and monitor for signs of continuation (elongating profile and volume).

 

ant, are you around? would love your take....

5aa70e0304887_ESProfileShapeSep172007.thumb.png.7011dacb65d3f7ff589308303705c004.png

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Hey Dogpile, how have you been? I've been reading your well thought out ES analysis and I agree with them. Let me give you my perspective, but I think you and I are pretty much in sync. Specifically, that the ES was balanced today, the profile shape was squat and symmetrical, value area was lower the past 2 days, and that we should look to trade with any directional move away from balance. However, with the FOMC meeting tomorrow, I don't expect any directional moves in the morning.

 

Here are some more details of my observations (see chart below), which may repeat some of your points. The ES gapped down and then traded up toward yesterday's POC, where the ES reversed and put in a selling tail. The sellers then auctioned the market down with some confidence towards yesterday's low. This is an initiative response from sellers since the ES was trading at or below yesterday's value area. Near yesterday's low, the buyers came in an put in a buying tail and auctioned the market up. The ES reversed prior to reaching today's selling tail. A few observations regarding the strength of the sellers vs buyers... The length of the selling tail (5 TPOs) was longer than the buying tail (2 TPOs), the morning auction down moved with more confidence and covered more distance than the up auction in the afternoon, sellers rejected the prices near the today's high (i.e., the selling tail provided resistance), and again we had initiative action by the sellers. If I had to pick a winner in today's tug-o-war, I would say that it was the sellers. This and the fact that the ES started a down auction within the bracket last Thursday gives me a short bias. Note that today's low also coincides with the high volume area of the composite profile shown in the chart below.

 

Let's take a closer look at the composite profile in the chart below, which covers the last down auction and the last up auction in the bracket. Note that the ES stalled today near the high volume area and that a 'ledge' has formed in the composite profile. According to Dalton, a ledge should be traded like a breakout. A directional move below the ledge will play well with our theme of a breakout from today's balanced profile. But we still need to monitor activity near the ledge because it could provide support as well. It looks to me like the market needs explore prices in the lower half of the composite profile before the ES can move up with confidence (especially in this low volume environment that we're in). I'm also keeping in mind the low volume area of the composite profile which could provide support. So unless tomorrow is a trend day (which I doubt), I think we can see the ES trade between 1497 and 1480. If the ES trades below the 'ledge' tomorrow and price is accepted below it, we could see an auction to the bracket low over the next few days. Given that tomorrow is Fed Day, perhaps these reference points will provide support/resistance after the announcement.

 

EDIT: Forgot to mention that there was also selling range extension in the ES today.

 

ES.thumb.GIF.a12b551209ca85fa99ea03bd8d2040bb.GIF

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today we had a gap up which potentially began a new up auction coming out of yesterdays 'balance' (VWAP=PVP=closing price yesterday). market formed a ABC-down pattern but was building higher value (VWAP>VWAP[1]). This is a bullish continuation pattern.

 

price climbed above 1498.00 -- a key prior pivot. price had been above this level a few times before only to form selling tails. thus while price had been above 1498.00, value (VWAP) had yet to breach 1498.00, until today.

 

the difference this time was that VWAP pulled above 1498.00 as mid-day approached. this signals price being 'accepted' above a known point of excess -- above 1498.00 had been an 'excess high' as the market had gapped down from this level last Thursday.

 

The FOMC cut fed funds 50 bps which surprised the market and sent the futures into a vertical move up.

 

Very strong volume and an elongated profile are characteristics of continuation -- and we got this. The day after a trend day often finds a good flush in the opposite direction of the trend move but this retracement should find support at some point as there is very likely residual upside momentum that should last into tomorrow if there is a good flush down. Typical day-after-trend-day action would be for the market to also 'balance' mid-day and should eventually break-out from this balance -- with the likely direction being up.

 

One caveat to the environment now is similar to what happened in Feb-March of this year. The market had drifted up on weak volume until today. Now the volume comes in after price had already been marked up 40-50+pts.

Thus, many longs have entered at relatively bad prices. While there should be residual momentum for tomorrow, we might need to shake these 'late-to-the-party' longs out of their positions at some point -- perhaps Thursday -- this is expiration week after all and these weeks tend to be volatile... Such a downside flush might then set-up a good buying opportunity for Friday or Monday. But this is all looking a few days out. For now, the auction is up.

 

Notably, XLF broke to a 20-day high today. We will need a down move at some point but this 20-day high is significant longer-term, IMO.

5aa70e046a749_ESProfileShapeSep182007.thumb.png.19c3545022dec5792e02eccf9d69ed13.png

5aa70e04710f4_SectorETFsSep182007.thumb.png.60e435b65d6f93b0305b9ea048163745.png

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great stuff.

Everytime I'm ready to give up on Mind Over Markets I randomly read a part of it then run across some gem. I just ran across the ledge part in ant's chart and Dalton's great movie theater/volume analogy earlier tonight. Seems like chipping away at it is that only way to read it. Someone always buys me books for christmas so I'm just going to wait and get Markets in Profile then.

 

Good point about alot of longs with bad location. Then on the other hand though maybe there was alot of higher time frame buyers on the phone with their brokers after 5pm. Tomarrow seems pretty tough.

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Dog - so have you traded any of these threads you have here? Are there possible trades here that I am not seeing? I was just wondering b/c James and I are doing well with our candlesticks over here - http://www.traderslaboratory.com/forums/104/djia-candles-2275-6.html#post19708

 

:thumbs up:

 

I always like to compare different strategies to see how they are performing in current market conditions. Of course, looking in hindsight is easy so I've been trying to post my thoughts in real-time over at that thread.

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<<so have you traded any of these threads you have here?>>

 

I trade for a living every day. I participate here partly to try to help explain to myself what is going on and treat it as kind of a trading journal as I can look back at the profile shape from past days or my comments and see what I was thinking at the time. The other part is in hopes of finding other traders to interact with. I have daytime contacts so I don't necessarily 'need' other traders -- but it would be nice. This is kind of a homework site for me.

 

This particular thread is more about 'context' -- I kind of juggle my trade set-ups based on the context. I have been trading lightly lately but anticipate far more trading now as the market opens up its range and volume (money flows) come back.

 

I just think in terms of price action relative to VWAP (ie, 'value'). I define patterns relative to VWAP/value. I don't know anybody else doing it this way. Everybody seems to have their own way. This way just speaks to me. I will check out the candlestick thread.

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Dogpile,

Ant had a composite profile up couple days ago and this is an area

we are breaking out of. I noticed that the shape is more like a p.

I know that p-shape means short-covering in a daily profile.

But I am just wondering whether the shape of a composite profile

has any meaning ? Just want your opinion.

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The other possibility is the shape of composite profile do have meaning,

but the shapes and interpretations of them are different from the daily profile.

Just a thought

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OAC,

 

I think the composite profile stuff is good to keep in mind but I am focused on just the recent auctions for actual trading.

 

it should be pointed out though that a 'P' is not a bearish profile, whether it is composite or individual day. It is not a strongly bullish profile either --- but it is consistent with how the market goes up a lot of the time. It pushes up and runs out of gas as some sellers come in, it pushes up again and sellers come in -- it does this for a multiple days as it marches up --- then it flushes down for a day or two to rinse out some of the longs and then it reverses (often in a 'b' daily profile), bottoms and churns up again. In terms of trading, I think the telling action is the action of the current auction.

 

markets maybe go up very quickly (like yesterday) or it may creep up. generally though, markets go DOWN quickly --- so a 'b' profile -- which indicates lack of seller conviction actually has bullish implications. I haven't found the 'P' to be all that useful for trading. Definitely look hard at b's though. Note, we had a b-like profile on Monday -- indicating lack of conviction at lower prices and potential for reversal. One of my set-ups in fact is to look for a 'b profile with an afternoon higher low' actually -- this may often resemble an inverse head & shoulders sometimes too. I have found this to be a very good profile set-up. That was actually the reason for the 'higher low' line I drew on that days summary in this thread. Can see it here:

 

http://www.traderslaboratory.com/forums/attachments/6/2922d1190071005-es-trading-for-9-17-rest-es-profile-shape-sep-17-2007.png

 

Markets tend to go down fast and hard when they want to go down -- the market may coil in the middle of the day and then break down hard in the afternoon -- but the afternoon higher low often completes a downside auction, IMO.

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Very unusual amount of volume at 1 particular price today.

 

Generally 40-60k contracts traded at one price represents the peak for the day. today, we already have > 100k contracts traded at 1546.00 and its only noon EST.

 

Note that PVP=VWAP=Last price, we are in perfect balance as I write this.

 

We have an 'excess low' below - the unfilled opening gap. We have an 'excess high' above -- the selling tail. So this makes for tough structure.

 

A break up might lead to a 'lower high' -- under a selling tail. A lower high UNDER a selling tail would be bearish -- but might not play out until very late in day or overnight. Also watch for Head & Shoulder top --- but these usually don't play out until very late so be careful.

 

The profile does not suggest continuation at this point. We have a 'fat profile' (very, very fat) and a selling tail above. However, we are building higher value so this is just not bearish.... net net, this is just a conflicted structure.

 

The main point was just to post how unusual this volume distribution is --- extremely high volume at a single price so early in the day.

 

First Thumbnail is the distribution at 10:36am EST

Second Thumbnail is the distribution at 12:08pm EST

5aa70e04e7f61_Sep1920071036amESTprofile.thumb.png.efd6325caef9b41724468cbef9a673b3.png

5aa70e04ef8a5_Sep1920071208pmESTprofile.thumb.png.01564ff9fe0d5a1a6813ba1569976ba7.png

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I am definitely alert of the high volume area around 1546. Thanks.

 

Here's my read of the market thus far... The day started with the buyers in control. As Dalton explained in MoM (pgs. 102-105), after the E period traded below the D period, that was a signal of a "potential" timeframe transition. When F period printed double EF TPOs below the D period, that confirmed seller control. So it looks like buyers relinguished control to sellers.

 

As you stated, we are building higher value which seems to indicate that the longer timeframe is keeping value higher (since the trend is up and it's the higher timeframes that starts trends/breakouts), but the day timeframe is trying to sell the market. Dalton also mentioned that when there is conflicting information, that may be caused by conflicting information from two different timeframes.

 

If the buying tail below is retraced, there is a high volume area around 1540 in the composite profile.

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Day structure in the ES is a Neutral Day, with trading on both sides of the Initial Balance. I'm hoping to get a trade opportunity to go long for a play towards today's high volume area around 1546, which Dogpile pointed out. Looking for a potential long around 1540. Let's see what happens...

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we coiled/balanced and broke lower. would expect the higher timeframe to run this back up and then for a lower high to eventually be put in... that said, the extremely fat volume at 1546 is weird and not sure what to think of that.

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Well, after a long slow slide down -- higher timeframe buyers did come back and push the market back up to just tick the 1546.00 level one more time.

 

The action at 1546.00 today was pretty bizarre. Maybe its something option related but the market traded a 'sh_tload' in the 2-pt range of 44.75 to 46.75.

 

Thus, as outlined previously, there are a lot of players who watched the S&P's go up and then entered at marked-up prices. The profile was very fat and we have a selling tail over 1546.00. On the plus side, we built higher value.

 

But we ended up closing below VWAP. A gap down would mean we will begin building lower value. This could start a 'down auction' that could feed on itself as weak-longs stuck at bad prices get tested and many capitulate. This idea is consistent with a Taylor Sell-short day that has lined up for tomorrow.

 

That said, there could also be enough residual momentum to keep the market afloat. We will just have to see.

5aa70e0530666_Sep192007FinalProfile.thumb.png.8777875f6599103f4f71acd140584f5c.png

5aa70e0536e51_Sep19TaylorChart.thumb.png.cbcc579d68e01a1c40e4c728349999ca.png

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Attached is the composite profile I referred to in my previous post in case you're interested in seeing it. I monitor the high and low volume areas, not individual prices.

ES-Composite.thumb.GIF.f8284161bc30d5ba61fa168a88d4e360.GIF

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Dogpile, I really like your charts and annotations. Where did you get the 'TVOL Comparison' indicator?

 

Another question, in your chart above, you show a bear flag, did you trade that bear flag because price was below VWAP or do you look at the wave structure in the 2min chart to set your bias? I'm assuming that your bias may change throughout the day. Is that correct? Thanks.

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ant, the only reason I am still posting here is because you did a few of these ES summaries and I got a lot out of reading your posts so I was hoping you and I could collaborate more and maybe some other Dalton/LBR/Taylor type of disciples will join in too...

 

<<Where did you get the 'TVOL Comparison' indicator?>>

 

its just simple, 78 5-min bars in a day so it compares em (note it will be wrong on a holiday-shortened day):

--------------

value1=(c-c[78]);

 

Plot1(value1, "VolSum");

----------------------

----------------------

<<Another question, in your chart above, you show a bear flag, did you trade that bear flag because price was below VWAP or do you look at the wave structure in the 2min chart to set your bias? I'm assuming that your bias may change throughout the day. Is that correct? Thanks.>>

 

Ant, very interesting question because you don't even know how long and hard I have thought about this type of dilemma. Do you go long on weakness or play a bear flag for another push down?

 

You are building HIGHER value (higher timeframe is pushing market up) but the market breaks below VWAP (lower 'daytime' timeframe players have begun pushing price lower than value. Now you are in a conflicted situation. On the one hand, you can buy with good location on a bullish day if you go long. On the other hand, the market might just be beginning a 'down auction' and pulse down again and again and trap the earlier buyers.

 

The short answer is that I did NOT take the 2-min bear flag -- although in retrospect that was the right trade. I don't know if it was a good ODDS trade but it was right nonetheless on this particular day. I was not looking to short today. But the break below vwap after a clean 'balance' (PVP=VWAP=price) is a warning sign to be careful on long side. The thing that threw me into confusion today was the bizarre action at 1546.00.... I haven't seen volume build like that before. You had a selling tail above and a huge wall at 1546.00 to get over --- so the structure was kind of difficult to be long except from well below 1546.00 -- as you stated in your intraday post.

 

Now clearly if VWAP was lower than previous day, I would have aggressively shorted on that bear flag.

 

--------------

 

<<I'm assuming that your bias may change throughout the day. Is that correct?>>

 

Lately, I have only been only taking super-clean trades -- where VWAP vs VWAP[1] and the pattern (flag, ABC, anti) are in the same direction.

 

The frustrating thing is like what happened today... I eventually got the long-pattern to go with my long bias. it was a 'buy-anti' but I missed filling by a single tick only to watch it march higher by 9 pts back to 1546.00 --- which clearly would have been the 'test' to exit on... I really have been screwing up a lot of trades lately.

 

in terms of wave structure, I am watchting the 400tick, the 800tick and the 5-min 3/10/16 oscillators. I also watch the 2-min chart but just for trade management --- I don't watch any oscillator on that timeframe. I also love the 15-min chart -- particularly the first cross pattern. We have a First Cross sell that set-up late today.

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Dogpile, thank you for your thorough response. I really do appreciate it!

 

I too benefit from reading other people's posts so I will continue to collaborate with you and others if there's still interest.

 

Throughout the day, I watch the 400T, 1600T, 5min, 15min, and 30min charts. I use the tick charts because they form some really clean patterns on the 3/10 oscillator and tick charts also allow me to set tighter stops compared to time charts. I use the time charts because I like to look at volume. Momentum and volume are the two key indicators that I look at. I also wtach the 30min chart for the Market Profile stuff and annotate one chart with key reference areas. Lately, I've been paying close attention to the developing Market Profile as well. I feel I still need to simplify my setup, but I'm not willing to get rid of any of these charts yet. Over time, I hope to keep the higher timeframe charts, such as the 15min and 30min, and use a tick chart for fine-tuning my entries.

 

One thing that I have been struggling with lately are my entries. Not necessarily looking for long or short trades, but instead determining how to enter. Should I enter a limit order ahead of time near support/resistance or do I wait for confirmation (i.e., wait for current bar to take out or close above/below previous bar)? This causes me to hesitate pulling the trigger at times. As a general rule, I think I am going to start waiting for confirmation. I think this improves my entries and allows me to set better stops.

 

EDIT: I forgot to mention that I also look at Time & Sales.

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The following charts highlight the key reference areas I'll be watching in the ES.

 

The following daily chart is of the full S&P contract which highlights gaps. Dalton suggests using the S&P contract because the Emini S&P tends to overshoot by a tick or so. Note the gaps above and below today's trading.

 

SP.GIF.9a5a070113b88237a1d62c6d880773fe.GIF

 

The next chart shows the volume profile for yesterday (9/18) and today (9/19). Note that the volume POC for 9/18 is 1532 and the TPO POC is 1500. The volume and TPO profile will differ notably on trend days like yesterday. Compare the volume profiles with the TPO profiles below. I will be monitoring the volume POC.

 

ES-VP.thumb.GIF.c1d98863b7501170d55a67f5290d4a17.GIF

 

The last chart contains today's profile and the key reference areas. Today was a Neutral Day with trading occurring on both sides of the Initial Balance. The ES closed in the bottom half of the daily range, which means that the sellers were marginally stronger.

 

ES.thumb.GIF.4c5f06192b8c3fa8807c612ec8795c9d.GIF

 

Finally, note that some of the key reference areas overlap making them more significant.

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Dogpile & Ant

 

Just wanted to say "Thank You" for these threads, your detail in your explanations are great and really help me understand how things are viewed upon.

 

Sorry I can't contribute, but I don't trade the ES, but your analysis does help me alot, when I look at my instrument (DAX).

 

I know it might seem it's just the two of you, but myself and I'm sure there are others that are benefiting from your knowledge.

 

 

Thanks again

 

Blu-Ray

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Market is balancing with VWAP < VWAP[1] (building lower value) --- hopefully this breaks lower and offers an entry to short...

 

If it breaks up, faces stiff resistance 43-46+ but might be worth a play... Maybe smaller size on a break up if get good entry and full-size if it breaks down with a good entry spot.

5aa70e065b92f_Sep20Mid-DayCoil.thumb.png.f75992b2dca23249694d0ad589817f5b.png

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    • Date: 7th April 2025.   Asian Markets Plunge as US-China Trade War Escalates; Wall Street Futures Signal Further Turmoil.   Global financial markets extended last week’s massive sell-off as tensions between the US and its major trading partners deepened, rattling investors and prompting sharp declines across equities, commodities, and currencies. The fallout from President Trump’s sweeping new tariff measures continued to spread, raising fears of a full-blown trade war and economic recession.   Asian stock markets plunged on Monday, extending a global market rout fueled by rising tensions between the US and China. The latest wave of aggressive tariffs and retaliatory measures has unnerved investors worldwide, triggering sharp sell-offs across the Asia-Pacific region.   Asian equities led the global rout on Monday, with dramatic losses seen across the region. Japan’s Nikkei 225 index tumbled more than 8% shortly after the open, while the broader Topix fell over 6.5%, recovering only slightly from steeper losses. In mainland China, the Shanghai Composite sank 6.7%, and the blue-chip CSI300 dropped 7.5% as markets reopened following a public holiday. Hong Kong’s Hang Seng Index opened more than 9% lower, reflecting deep concerns about escalating trade tensions.           South Korea’s Kospi dropped 4.8%, triggering a circuit breaker designed to curb panic selling. Taiwan’s Taiex index collapsed by nearly 10%, with major tech exporters like TSMC and Foxconn hitting circuit breaker limits after each fell close to 10%. Meanwhile, Australia’s ASX 200 shed as much as 6.3%, and New Zealand’s NZX 50 lost over 3.5%.   Despite the escalation, Beijing has adopted a measured tone. Chinese officials urged investors not to panic and assured markets that the country has the tools to mitigate economic shocks. At the same time, they left the door open for renewed trade talks, though no specific timeline has been set.   US Stock Futures Plunge Ahead of Monday Open   US stock futures pointed to another brutal day on Wall Street. Futures tied to the S&P 500 dropped over 3%, Nasdaq futures sank 4%, and Dow Jones futures lost 2.5%—equivalent to nearly 1,000 points. The Nasdaq Composite officially entered a bear market on Friday, down more than 20% from its recent highs, while the S&P 500 is nearing bear territory. The Dow closed last week in correction. Oil prices followed suit, with WTI crude dropping over 4% to $59.49 per barrel—its lowest since April 2021.   Wall Street closed last week in disarray, erasing more than $5 trillion in value amid fears of an all-out trade war. The Nasdaq Composite officially entered a bear market on Friday, sinking more than 20% from its recent peak. The S&P 500 is approaching bear territory, and the Dow Jones Industrial Average has slipped firmly into correction territory.   German Banks Hit Hard Amid Escalating Trade Tensions   German banking stocks were among the worst hit in Europe. Shares of Commerzbank and Deutsche Bank plunged between 9.5% and 10.3% during early Frankfurt trading, compounding Friday’s steep losses. Fears over a global trade war and looming recession are severely impacting the financial sector, particularly export-driven economies like Germany.   Eurozone Growth at Risk   Eurozone officials are bracing for economic fallout, with Greek central bank governor Yannis Stournaras warning that Trump’s tariff policy could reduce eurozone GDP by up to 1%. The EU is preparing retaliatory tariffs on $28 billion worth of American goods—ranging from steel and aluminium to consumer products like dental floss and luxury jewellery.   Starting Wednesday, the US is expected to impose 25% tariffs on key EU exports, with Brussels ready to respond with its own 20% levies on nearly all remaining American imports.   UK Faces £22 Billion Economic Blow   In the UK, fresh research from KPMG revealed that the British economy could shrink by £21.6 billion by 2027 due to US-imposed tariffs. The analysis points to a 0.8% dip in economic output over the next two years, undermining Chancellor Rachel Reeves’ growth agenda. The report also warned of additional fiscal pressure that may lead to future tax increases and public spending cuts.   Wall Street Braces for Recession   Goldman Sachs revised its US recession probability to 45% within the next year, citing tighter financial conditions and rising policy uncertainty. This marks a sharp jump from the 35% risk estimated just last month—and more than double January’s 20% projection. J.P. Morgan issued a bleaker outlook, now forecasting a 60% chance of recession both in the US and globally.   Global Leaders Respond as Trade Tensions Deepen   The dramatic market sell-off was triggered by China’s sweeping retaliation to a new round of US tariffs, which included a 34% levy on all American imports. Beijing’s state-run People’s Daily released a defiant statement, asserting that China has the tools and resilience to withstand economic pressure from Washington. ‘We’ve built up experience after years of trade conflict and are prepared with a full arsenal of countermeasures,’ it stated.   Around the world, policymakers are responding to the growing threat of a trade-led economic slowdown. Japanese Prime Minister Shigeru Ishiba announced plans to appeal directly to Washington and push for tariff relief, following the US administration’s decision to impose a blanket 24% tariff on Japanese imports. He aims to visit the US soon to present Japan’s case as a fair trade partner.   In Taiwan, President Lai Ching-te said his administration would work closely with Washington to remove trade barriers and increase purchases of American goods in an effort to reduce the bilateral trade deficit. The island's defence ministry has also submitted a new list of US military procurements to highlight its strategic partnership.   Economists and strategists are warning of deeper economic consequences. Ronald Temple, chief market strategist at Lazard, said the scale and speed of these tariffs could result in far more severe damage than previously anticipated. ‘This isn’t just a bilateral conflict anymore — more countries are likely to respond in the coming weeks,’ he noted.   Analysts at Barclays cautioned that smaller Asian economies, such as Singapore and South Korea, may face challenges in negotiating with Washington and are already adjusting their economic growth forecasts downward in response to the unfolding trade crisis.           Oil Prices Sink on Demand Concerns   Crude oil continued its sharp slide on Monday, driven by recession fears and weakened global demand. Brent fell 3.9% to $63.04 a barrel, while WTI plunged over 4% to $59.49—both benchmarks marking weekly losses exceeding 10%. Analysts say inflationary pressures and slowing economic activity may drag demand down, even though energy imports were excluded from the latest round of tariffs.   Vandana Hari of Vanda Insights noted, ‘The market is struggling to find a bottom. Until there’s a clear signal from Trump that calms recession fears, crude prices will remain under pressure.’   OPEC+ Adds Further Pressure with Output Hike   Bearish sentiment intensified after OPEC+ announced it would boost production by 411,000 barrels per day in May, far surpassing the expected 135,000 bpd. The alliance called on overproducing nations to submit compensation plans by April 15. Analysts fear this surprise move could undo years of supply discipline and weigh further on already fragile oil markets.   Global political risks also flared over the weekend. Iran rejected US proposals for direct nuclear negotiations and warned of potential military action. Meanwhile, Russia claimed fresh territorial gains in Ukraine’s Sumy region and ramped up attacks on surrounding areas—further darkening the outlook for markets.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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