MARKET WRAP

Today’s trading saw a bit of everything, another threat of a steep sell-off, an attempt at a bounce, and a close lower, but nothing like yesterday's carnage. In fact, small caps finished green. A cacophony of tariff headlines (or tweets) once again dominated the tape. Up next, tomorrow mornings CPI. Let’s go to the tape: SPX -0.75%, QQQ -0.28%, IWM +0.22%. The 10y yield was higher, now 4.29%. Oil rebounded slightly, now $66.52. More on tomorrow’s CPI expected moves and trading in high volatility at the bottom of the email.

On today’s MRKT Call some looks at what could bounce, if we bounce. And on RiskReversal Pod, Dan is joined by Mark Mahaney of Evercore with a discussion of the current market, the dot-com bubble, and more. Enjoy!

MRKT MATRIX: March 11, 2025

Today’s Top Stories:

• S&P 500 comes under pressure again as traders deal with more Trump tariffs (CNBC)

• Citi Downgrades US Stocks While Wall Street Set to Pause Selloff (Bloomberg)

• Legendary Bear Marko Kolanovic Explains the Market Slump (Bloomberg)

• Wall Street Fears Trump Will Wreck the Soft Landing (WSJ)

• Traders Look to Bonds, Currencies to Escape US Stock Selloff (Bloomberg)

• Consumers Keep Bailing Out the Economy.  Now They Might Be Maxed Out. (WSJ)

• Big downside for bank stocks if this ‘detox’ period turns into recession, says Bank of America (CNBC)

• US Airlines Slash Guidance as Economy, Accidents Spook Flyers (Bloomberg)

• Buy Tesla on the dip as shares can rally more than 90%, says Morgan Stanley’s Jonas (CNBC)

• Ozempic’s New Frontier: The War on Aging (WSJ)

• How ‘inference’ is driving competition to Nvidia’s AI chip dominance (Financial Times)

• OpenAI forges $12bn contract with CoreWeave (Financial Times)

• SoftBank-Backed Self-Driving Firm Wayve Nears Commercial Debut (Bloomberg)

Today’s MRKT Call is Presented by Robinhood

Stock Sell-Off Continues: How To Trade For A Bounce

The show kicks off with a focus on the market sell-off and where SPX might find support. Next, we look ahead to tomorrow’s CPI report and what the market is hoping for. Chart of the Day: QQQ and the potential for a near-term countertrend bounce. From there, we dive into recent sector performance, leading into a broader discussion on AVGO vs. other big names like MSFT. Next up: a breakdown of AXP and COF, followed by a look at XLF and a potential trade setup. Guy highlights the XRT chart and another possible bounce opportunity, while Dan shifts the focus to travel stocks, analyzing UAL as it tests a key moving average.

Click here to access all of the charts mentioned in today’s MRKT Call.

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Today’s RiskReversal Podcast is Presented by Current and RBC

Tech Stocks Without A Net & A Conversation with Mark Mahaney

Dan Nathan welcomes Mark Mahaney, Senior Managing Director and Head of Internet Research at Evercore ISI, back to the RiskReversal Podcast. They discuss major shifts in the stock market, comparing today’s landscape with the dot-com bubble of 2000. Key topics include recent significant corrections in major tech stocks like Meta, Netflix, and Google, and the long-term investment opportunities these dislocations might present. Mark shares his investment strategy focusing on high-quality companies, the evolving internet landscape, and regulatory impacts on tech giants. The conversation also touches on the future of tech investments, the role of capital expenditures, and Uber's potential in the autonomous vehicle market.

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What’s Next?

We get into the part of the week with some large potential (known) catalysts beginning with tomorrow morning’s CPI. Here are the expected moves for tomorrow based on today’s closing option prices:

• SPX/SPY: 1.4%

• QQQ: 1.8%

• IWM: 2.0%

• TLT: 0.8%

As mentioned a few times here over the past few days, this 5565 level is important in the options market structure backdrop (The SPX has danced around here for the past 24 hours and closed today at 5572). Those short (market makers) the 5565 strike (March 31st) will have hedged about half the risk (and were important in adding to yesterday's selling). A mild bounce here and they're not adding much to the rally, a large bounce and they have to. A break below and they have more to sell. The farther the fall from here the more they help accelerate the selling. To be clear it's not "support", but more of a potential pivot spot either way, potentially violent. Which brings me to:

Short Term Trading in a High Vol Environment 

When the market is volatile, implied volatility (IV) is high, making options expensive. In other words, there's no free lunch when trying to trade these dramatic moves. While many traders manage high IV by being net sellers of premium, there’s another approach that’s more tactical—or even a bit cheeky.

One Tactical Approach: Narrow Vertical Spreads

Extremely narrow, out-of-the-money vertical spreads allow traders to position for short-term moves at a lower cost. These spreads limit premium paid while still offering a strong risk/reward profile if the move materializes. Since IV inflates even wider vertical spreads, keeping the strike difference tight avoids excessive costs. This is for quick bounces or breakdowns, not necessarily for capturing a medium-term trend—wider spreads or credit spreads may be better suited for that.

Example: A $1 Wide QQQ Call Spread

QQQ has had a 26-point range in the past few days. If one wanted to position for a short-term rebound, even as a countertrend bounce:

• The at-the-money call is trading around $7, implying about a $14 move just to double in value.

• If wrong, or if QQQ moves violently but sideways, that’s a lot to pay.

Instead, buying a slightly out-of-the-money, $1-wide call spread for about $0.35 (those are currently about $6 away if going out to Friday’s expiry) means:

• You only need a $7 or so move in QQQ by Friday’s close to nearly triple your investment. (as opposed to needing a $14 move to double a $7 at the money call). That’s a much lower hurdle.

• The call spread is an an example here because of the chance for a countertrend bounce. But the same applies for a slightly OTM narrow put spread for a breakdown below here into Friday.

A rather binary outcome but at this level of volatiltiy, almost everything is.

If QQQ moves and holds beyond your strikes, the spread achieves max profit. If QQQ moves in the other direction or stays flat, the spread expires worthless. The advantage? Controlled risk in a high-volatility environment, where moves are violent and almost binary anyway. With the VIX near 30, the likelihood of no move at all is slim—but if you get your move and timing right it’s not much to clear your strikes. And if wrong, you limited your outlay, and can size to whatever amount feels safe to lose, or you would want to triple.

This is easier to do in the ETF’s due to the narrow strike widths. In individual names it’s somewhat less accessible, but some extremely volatile names like NVDA do have $1 wide strikes.



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