Dominant Uptrend from March 2020 Pandemic Low Severed

Good Monday Morning, MPTraders! April 7, 2025-- Pre-Market Update: Friday's close on the lows, and Friday's after-market press to lower-lows overlaid on our discussions about the prospect of POTUS and his cabinet holding a hard line on tariffs over the weekend (which is precisely what they did), is anyone surprised that the equity markets are considerably lower this morning? Hardly... But (reverse) Sticker shock is an emotional issue, and I certainly appreciate everyone's angst as we head into another tension-filled week that will include CPI, PPI, and the start of a new quarterly Earnings season (see Economic and Earnings Calendars below)...

Before we venture into the weeds of the economics, politics, and geopolitics of the fallout from the newly imposed tariff policy, let's get our bearings technically, because, frankly, the technical setup is all any investor has right now to tell where the markets have been, and perhaps, where the markets are heading.

My attached BIG Picture Weekly ES Chart tells and warns us about the following:

-- The dominant uptrend from the March 2020 Pandemic Low was severed in the vicinity of 5232 last week, a level that now becomes strong resistance on any potent recovery rally...

-- At the overnight low of 4832.00, ES had corrected 22.5% from the ATH (6233.50) and had retraced-- and recovered from-- the support area around the Fibonacci 38% support plateau of the entire post-pandemic bull market...

-- Considering the bounce from the Fibo 38% support zone of 4830/60 to a pre-market recovery rally high at 5040-- just beneath Friday's low of 5074, let's consider that a near-term (temporary) trading range and bearish digestion area has been established this morning that could last hours or days before the dominant trend reasserts itself to the downside that next targets 4430 to 4500... 

-- Let's recognize that for the first time since April 2022 (almost exactly 3 years ago), the WEEKLY MACD Momentum oscillator has declined below the Zero Line into negative territory, which is a major warning signal that the multi-month decline from the ATH at 6233.50 to today's low at 4832.00 has unfinished business on the downside that has potential to realize downside targets of 4430-4500 and possibly 3900-4000 before exhaustion...  

Bottom Line: When the weekly setup exhibits this much negativity, RALLIES SHOULD BE TREATED AS NEAR-TERM POSITIVE EVENTS AND NOT AS BUY-AND-HOLD OPPORTUNITIES... Last in ES is 5012 off of an overnight low at 4832.00...