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Traders in a Holding Pattern
RiskReversal Recap: May 9th, 2025
RiskReversal Media & RiskReversal Media
May 09, 2025
MARKET WRAP
A quiet day that saw the SPX attempt a morning rally that found sellers in the first hour, finishing close to unchanged on the day. This week saw the SPX trade within a 2% range and close essentially unchanged from last week despite earnings reports, an FOMC meeting and an announced trade deal. Traders are clearly in a holding pattern for now.
On the day SPX -0.1% QQQ unchanged, and IWM -0.2%. It was quiet elsewhere with the 10Y yield a tick higher to 4.39%, Gold and Oil also with small moves higher. The VIX held fairly steady into the weekend at 22.
RiskReversal Pod: Dan is joined by Dan Benton, CEO at Benton Capital Management & legendary former technology analyst at Goldman Sachs, to talk Apple, Microsoft, and Google, AI and AR/VR. They also discuss future prospects for companies like Nvidia and Tesla, and SpaceX.
MRKT MATRIX: TODAY’S TOP STORIES
Stocks muted on Friday as traders are cautious ahead of China trade talks (CNBC)
Trump Says 80% China Tariff ‘Seems Right,’ Ahead of Talks (Bloomberg)
First Chinese freight ship goods hit with Trump’s 145%-plus tariffs arriving at U.S. ports (CNBC)
Buy the trade deal expectations, but sell the fact, BofA’s Hartnett says (CNBC)
Key S&P 500 Model Turns Bearish for First Time in Two Years (Bloomberg)
Trump Seeks Tax Hike on Wealthy Earnings $2.5 Million or More (Bloomberg)
Fed’s Barr Warns Tariffs Risk Higher Inflation, Unemployment (Bloomberg)
S&P 500 Earnings Season Update (FactSet)
Q1 2025 S&P 500 Midseason Earnings Update (Apple Podcasts)
IPO Market, Frozen Since Liberation Day, Shows Some Signs of Thaw (WSJ)
WHAT’S NEXT?
Stocks ended the day little changed, closing out a week marked by narrow, range-bound trading as the S&P 500 hovered between 5600 and 5700. The market appears to be in a holding pattern, with traders hesitant to press positions either way. On one hand, few want to be caught short in case of surprise headlines around trade negotiations—particularly any signs of progress with China. On the other, there's reluctance to chase equities higher toward all-time highs after the sharp "V reversal" rally from recent lows. The chances of a face ripping rally from here are unlikely given the lower overall volatility and long gamma backdrop.
This equilibrium has produced a pattern where sellers emerged on strength and buyers stepped in on weakness, keeping the index locked in a tight band since the 9 straight up days for SPX that proceeded it. Unless a major piece of economic data rattles investors or a bullish catalyst—such as a finalized China trade deal—materializes, this sideways action may persist in the near term. Despite the VIX reading near 22, market behavior feels more in line with a volatility index at 16, underscoring the current sense of calm and indecision. But the VIX is 22, not 16, which makes it feel much more like a holding pattern than the end of recent volatility.
We’ll be back this weekend with a look ahead at next week’s potential catalysts as well as a look farther out on the calendar to see when traders might expect the resolution for stocks since the recent bounce.
TODAY’S EPISODES
Watch RiskReversal Podcast’s newest episode: Finding The Next $5 Trillion Company: Dan Benton's Rules For Tech Investing In 2025
Dan Nathan & Dan Benton discuss tech investing. Benton, CEO at Benton Capital Management & legendary former technology analyst at Goldman Sachs, shares his experiences from the 90s to present. |
They delve into his famous '20 investing rules' for technology, the secular shift towards the internet, and valuation principles. Key conversations include the evolution of major tech companies like Apple, Microsoft, and Google, their strategies, management styles, and the broader implications of AI and AR/VR. They also discuss future prospects for companies like Nvidia and Tesla, touching on SpaceX's potential impact. The discussion highlights the importance of innovation, management quality, and strategic foresight in tech investing.
Rules For Tech Investing: https://www.slideshare.net/slideshow/...
Timecodes
0:00 - The Rules
13:00 - Management
22:05 - AI Wars
34:30 - Apple's Dilemma
43:30 - Nvidia
52:00 - Elon & Space
57:45 - "The Mag6"
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