NEWS
Trump's 25% Auto Import Tariffs: Who Will Be Affected Most?

President Trump has announced plans to impose a 25% tariff on all imported automobiles, set to take effect on April 2. This new tariff, an increase from the previously planned 2.5%, will impact automakers differently, depending on how much of their U.S. sales are imported.

Manufacturers with higher percentages of imported vehicles will face the biggest hit. For example, brands like Volvo, Mazda, Volkswagen, and Hyundai (including Genesis and Kia) import over 60% of their vehicles for U.S. sales, according to S&P Global Mobility. In contrast, companies like Ford, Honda, Stellantis, and General Motors manufacture more cars domestically, which could shield them from the full impact of the tariffs.

The Trump administration argues that these tariffs will help revitalize U.S. manufacturing by curbing foreign competition, which it claims benefits from unfair subsidies. However, experts suggest that the tariffs might not immediately boost domestic production. Only GM, Ford, and Stellantis have the capacity to expand production in the U.S., but shifting production would require significant investment in facilities and suppliers.

The tariffs are expected to raise car prices, exacerbating affordability issues for consumers, as most vehicles contain parts sourced from multiple countries. Automakers may adjust prices across several models to offset the tariff costs, potentially spreading the price increase and making it harder for consumers to gauge the exact impact.

This move signals a shift in U.S. trade policy, but its long-term effects on the auto industry and car prices remain to be seen.

MARKET
Money Continues To Flow Out Of US

The market remains in a state of heightened uncertainty, and the latest economic data points only add to the complex landscape traders are navigating. On Friday morning, the release of the Personal Consumption Expenditures (PCE) index brought fresh insights into inflation trends, with the Federal Reserve’s preferred gauge, "core" PCE, showing a larger-than-expected increase. Prices rose 0.4% month over month and 2.8% year over year, highlighting the ongoing challenge the Fed faces in reaching its inflation target. The data is yet another signal that inflation remains persistent, and while the pace may be moderating, the path to stabilization is far from clear.

But why is the PCE so important? The Personal Consumption Expenditures index measures the prices that consumers pay for goods and services and is a key indicator of inflation in the U.S. economy. Unlike other inflation measures, such as the Consumer Price Index (CPI), the PCE index accounts for changes in consumer behavior, meaning it reflects the shift in spending patterns as prices change. The "core" PCE, which excludes volatile food and energy prices, is the Federal Reserve's preferred inflation gauge because it provides a clearer picture of underlying inflation trends, without being skewed by short-term price fluctuations.

This data comes on the heels of President Trump's announcement of a 25% tariff on all imported cars, another development that rattled markets and stoked fears of further economic slowdowns. The combination of these inflationary pressures and tariff fears has sparked renewed concerns about weakening consumer sentiment, which could signal a broader economic slowdown. Investors are now looking ahead to April 2 for potential clarity, but, as things stand, the volatility that has plagued the market seems likely to persist. With no clear policy direction yet, it’s safe to say that the uncertainty that has characterized the market recently will likely continue to weigh on investor sentiment in the coming weeks, and we can clearly see this reflected in the technicals.

Nasdaq

The Nasdaq continues to display a textbook example of a bear flag pattern on its daily chart. A bear flag typically has two key characteristics: a sharp decline in price, which forms the "pole," and then a consolidation or upward movement that creates the flag itself. In this case, the sharp sell-off that began in February this year clearly sets up the pole, followed by a sideways or slightly ascending channel that has formed since the beginning of March.

The second crucial feature of a bear flag is a steady decline in volume during the upward price movement, creating a divergence between price and participation. As the price moves higher, the volume decreases, signaling diminishing demand. This divergence is a key sign of weakening momentum. Essentially, less participation in the upward move means that the rally lacks conviction and is more likely to fail, setting up the potential for another leg down once the flag breaks to the downside.

We are currently seeing the QQQ showing a potential setup for a short trade, or alternatively, a long position in the SQQQ (the inverse QQQ ETF). In situations like this, looking at the inverse versions of the main indices can be an insightful approach. Sometimes, flipping the chart to view the opposite movement—essentially what the market would look like if it were going down instead of up—can give a clearer perspective on the current market conditions and help you determine where you stand.

Semiconductors (SMH), which are some of the most closely watched and largest subsectors of the Nasdaq, tracking major mega cap technology names, are currently in a clear Stage 4 breakdown according to Stan Weinstein's methodology. This breakdown occurred as SMH broke down from its bear flag pattern on Wednesday of this week. Given the similarities in structure, it’s very likely that we could see the same type of action play out in the QQQ today.

S&P Midcap 400

The midcaps have seen a noticeable increase in participation—meaning volume—over the last three sessions, with price action indicating a breakdown in the MDY as it failed to hold the rising 10 and 20-EMA. This suggests that we are likely on the cusp of another significant markdown.

Furthermore, as capital continues to flow out of the U.S. equities market as a whole, it's highly unlikely that midcaps will show any strength anytime soon. They’re generally not the go-to sector when there's a shift away from U.S. assets, especially given the broader market struggles. While some traders might consider short positions in this environment, shorting in a market like this presents its own challenges. The choppy price action and increased volatility can make precise entries difficult, and any bear market rallies in the short term will quickly squeeze positions.

Russell 2000

The small-cap sector, represented by the IWM, continues to be the worst performer from a capitalization standpoint. The volume pocket above the 20-EMA, where the IWM was previously rejected, remains unfilled, indicating that there's a clear level at which sellers are actively defending.

This pattern suggests that the IWM is setting up for a significant move lower, with a high degree of certainty. Both the value and growth variants of the small-cap sector—the SLYV (small-cap value) and SLYG (small-cap growth)—show similar characteristics. These ETFs are forming rising bear flags on low relative volume, which indicates that there is a lack of buying interest and that money is flowing out of the small-cap space as a whole.

Even defensive pockets, such as small-cap consumer staples stocks, are failing to hold up. This is a clear sign that the broader small-cap sector is under pressure, with the flow of capital still moving away from these stocks.

DAILY FOCUS
This Sucks- We Know.

The market’s been rough, and the price action is giving traders a headache. If you’re feeling the frustration, you’re not alone. But here’s the deal: we can’t afford to get caught up in the noise or let the choppy, volatile conditions throw us off course. Uncertainty is everywhere, and the market’s indecision is palpable. The dollar, stocks, and bonds are all under pressure, which signals a lot of uncertainty. Normally, when one of these markets is down, capital flows into safe havens. However, when all three are falling at once, it indicates that investors are struggling to find a safe place to allocate their capital. This situation is creating a liquidity squeeze and raising concerns about broader economic issues.

We’ve now entered a period where tradable conditions have been hard to come by for the entirety of 2025. It’s been one of the more challenging market climates in recent years. At this point, your goal should shift from trying to make money to focusing on protecting what you’ve got. This is where a lot of new traders go wrong—they’re attracted to the thrill of trading but fail to realize how long-term of a game this really is. The SPY itself is down -3.79% YTD. If you’ve managed to stay in cash since late 2024, when the market became obviously choppy, you’d actually be outperforming the SPY, the benchmark for the U.S. market. Just sitting tight and staying out of trouble can be a huge win in times like these.

From a practical standpoint, the best use of your time right now is to review your performance and recent trades. Use this time to focus on improving your skills, as the market conditions are less about catching the next big trade and more about refining your ability to navigate difficult environments.

WATCHLIST
Nothing To Declare