Date: April 10, 2025
Timeframe: Daily
Price: 5,405.50
Volatility (ADR14): 214.86 (elevated)
Macro Driver: Trump’s tariff announcement shocks markets
Macro-Fundamental Update: Tariff Escalation Jars Markets
On April 9, President Trump announced a new wave of tariffs aimed primarily at foreign imports from Europe and parts of Asia, including steel, EVs, and semiconductors. This was framed as a national economic security initiative but triggered sharp market concerns over:
- Retaliation from U.S. allies — France and Germany have already hinted at countermeasures.
- Global supply chain disruptions — markets are quickly repricing in slower global trade growth.
- Corporate margin compression — rising import costs threaten earnings for manufacturers and tech firms in particular.
Technical Overview – Is the Bounce Real or a Trap?
Market Context:
- Last week saw historic intraday volatility, culminating in a two-day rebound.
- This bounce occurred after RSI fell near oversold territory (RSI low ~25) and the ADR exploded above 200 pts — classic fear washout behavior.
Key Technicals
- Structure: We have not reclaimed any broken trendlines or key levels — it’s still a downtrend.
- ADR (214.86): Sustained volatility at this level generally precedes large directional moves.
Dead Cat Bounce or Turning Point?
🐻 Bearish Case – Stronger
- Protectionist policies are anti-growth, especially for multinationals (Apple, Boeing, Caterpillar).
- Europe may retaliate, escalating trade tensions and causing a multi-quarter earnings drag.
- Volatility, macro headwinds, and technical damage all remain unresolved.
🐂 Bullish Case – Weak
- Markets were deeply oversold — a technical bounce was overdue.
- The dollar has weakened recently, which could eventually help equities.
- Rate cuts are still possible later this year if recession conditions worsen.
Bottom line? The market remains in correction mode. The bounce was a reflexive move, not a structural pivot.
Summary Table
| Category | Signal |
|---|---|
| Macro | ⚠️ Bearish (tariffs, retaliation) |
| Technical Structure | ❌ Bearish below MAs |
| Momentum (RSI) | ↗ Rebounding from oversold |
| Volatility (ADR) | 🚨 High and sustained |
| Trade Setup Bias | None at the moment |
Final Take
Despite the rebound attempt, this market is facing renewed macro risk from Trump’s tariff-driven trade conflict, which could escalate quickly and further damage equity valuations. Until bulls reclaim the 5,500–5,600 zone with volume, this is best treated as a bear market bounce — not the start of a new uptrend.
If the dollar continues falling and bond yields stabilize, there could be room for a squeeze.
Next Key Support: 5,200
Next Resistance: 5,500–5,565
