Four Weeks Wiped Out
Markets Crater as Trump Drops Tariff Bombshell - Support and Resistance Levels for Next Week
What started as a quiet Friday turned into one of the ugliest trading days we’ve seen in months.
U.S. stocks went into freefall on Friday after President Trump suddenly reignited the trade war with China, wiping out not just the week’s gains, but the entire month’s progress in a matter of hours. The S&P 500 crashed 2.7%, the Nasdaq got hammered for 3.6%, and the Dow shed 879 points, marking the worst session since April for the major indices.
The sell-off kicked off with a presidential social media post threatening a “massive increase” in tariffs on Chinese goods. If that wasn’t enough to spook investors, an after-hours announcement dropped the real bombshell: a 100% tariff on Chinese goods starting November 1. Yes, you read that right: 100%.
Technology stocks, particularly semiconductors, bore the brunt of the damage. The Information Technology sector plunged 4.0%, while the SMH Semiconductor ETF, a key barometer for chip stocks cratered -5.8%.
Individual casualties included:
NVIDIA: Down 4.9%
Advanced Micro Devices: Dropped 7.7%
Qualcomm: Fell 7.3% (also facing a new antitrust probe from Beijing)
Price Action Is Primal
We’ve been closely examining overbought conditions, the market just needed a catalyst, and as suggested on Wednesday, maintaining caution was indicated as crucial considering our premium studies of the Volatility Index (VIX). A sooner pullback is beneficial for sustaining bullish momentum in November and December, since continuing with a more overheated market can lead to a more dramatic swing; remember our study of comparable rallies and the double digit corrections when the market extended the exuberance.
Risk Management and Performance Enhancement
The Support and Resistance levels, published every Friday, provide a central weekly level that was backtested last Wednesday for SPX, QQQ, TSLA, and NVDA. This highlights the value of a risk management approach, particularly when considering buys upon the recovery or holding of the central weekly level (and sells when it is lost), as opposed to a simple buy-and-hold strategy. The results have been impressive:
From April 24th (the date of the bullish signal shared in the paid subscribers’ chat) to October 8th, the outcomes analyzed on Wednesday are:
SPX:
Buy-and-Hold ROI: +22%
Buy/Sell ROI: +25%
QQQ:
Buy-and-Hold ROI: +24.8%
Buy/Sell ROI: +30.24%
TSLA:
Buy-and-Hold ROI: +68.7%
Buy/Sell ROI: +83% (with an alternative +97% by adjusting risk tolerance)
NVDA:
Buy-and-Hold ROI: +87%
Buy/Sell ROI: +111%
Today, we’ll explore three additional cases also from April 2025, closing today after the selloff, you will see how valuable is the central weekly level:
AAPL:
Buy-and-Hold ROI: +46%
Active Buy/Sell ROI: +63%
IBIT (Bitcoin ETF):
Buy-and-Hold ROI: +58%
Active Buy/Sell ROI: +64%
SPX (Oct 2024 - Apr 2025 - To analyze how the levels can help navigate choppy markets when a top is near):
Buy-and-Hold ROI: +1.8%
Active Buy/Sell ROI: +7.4%
These findings demonstrate how leveraging the weekly levels published in this publication can enhance returns through a disciplined risk management approach, particularly when compared to a passive buy-and-hold strategy.
This publication consistently analyzes the following securities to provide a broad market perspective and empower your trading decisions:
Indices & Futures: SPX, NDX, DJI, IWM, ES=F, NQ=F
ETFs: SPY, QQQ, SMH, TLT, GLD, SLV, DIA, SH, PSQ
Major Stocks: AAPL, MSFT, GOOG, AMZN, NVDA, META, TSLA, BRK.B, LLY, WMT, AVGO, COST, JPM, PLTR, NFLX
Crypto & Related: Bitcoin, ETH, IBIT, MSTR
Leveraged ETFs: TQQQ, SQQQ, UDOW, SDOW, UPRO, SPXS, URTY, SRTY
Subscribe now, and unlock the charts that provide visual evidence of the performance when applying the central level approach using the figures provided here every Friday for the securities mentioned.
I will focus this weekend to the Support and Resistance levels, next week we will continue with the next section of the eBook so you can digest these S/R studies.
Below you can find the charts for SPX, IBIT, AAPL; and QQQ, TSLA, and NVDA in case you missed them on Wednesday.
Backtesting is an extensive duty, hence the time of this publication. This visual exercise is extremely valuable for traders and investors.
Based on the backtests, the central levels included below are the best way to validate any potential bounce and differentiate a legit bounce from a technical one that does not reach sufficiency in price terms.
SPX - Over-performing Nearing a Top and Closing Positions before a Crash: