March 11, 2025

Markets:

Stock futures edged higher Tuesday following Monday’s broad sell-off, driven by growing concerns over a potential recession.

Monday’s session saw sharp declines, with the S&P 500 extending its losing streak to three consecutive weeks. The Nasdaq Composite had its worst day since September 2022, while the Dow plunged nearly 900 points, closing below its 200-day moving average for the first time since November 1, 2023.

Wall Street’s recession fears have intensified. In a Fox News interview aired Sunday, former President Donald Trump described the economy as being in “a period of transition.” His comments followed Treasury Secretary Scott Bessent’s remarks on CNBC Friday, where he warned of a potential “detox period” as the Trump administration moves to cut federal spending.

Investors are now looking ahead to key economic reports this week. Job openings data is set for release on Tuesday, followed by February’s consumer price index (CPI) on Wednesday morning and the producer price index (PPI) on Thursday.

Portfolio:

We enter the day holding one setup in AAPU. Patience will be key as we watch price action and flow this morning—there’s a lot to learn from today’s movement.

Monday felt like a capitulation event in the market. Futures (NQ) have since recovered over 1.5% of overnight losses and are now positive. The question now is—was that the bottom? That’s a significant bounce, and we’ll be watching to see if it holds. This is exactly how market bottoms typically form, with yesterday’s flush playing a necessary role in the process. In times of uncertainty, price swings can go from one extreme to another quickly—it’s pure emotional trading, shifting from one crowded trade to the next.

A friendly reminder—this type of price action happens one to three times per year. Markets flush, fear takes hold, and then we recover and move higher. Many forget the broader trend we are still in. Unless SPY breaks below 550, that remains our approach.

VIX:

The CBOE Volatility Index has spiked to 29, but what’s more notable is that the VIX curve is now in backwardation—meaning near-term VIX options (cash and March contracts) are priced higher than those further out (April, May, June). This is an uncommon occurrence that signals extreme short-term fear. Historically, this has aligned with at least a short-term tradable bottom. Let’s see if that holds true again.

Let’s stay focused and be ready to attack if the right setups emerge—there could be some major opportunities brewing today.