Economic Announcements:

• 2:30 PM: Durable Goods Orders
• 4:00 PM: Atlanta Fed GDPNow

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Corporate Earnings:

• N/A

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S&P 500 Analysis:

VPOC: 6638
VVA: 6629-6650
High-Low: 6567-6661
PP: 6625
Open: 6650.50
Vix: 24.27

Yesterday, the S&P 500 opened with a bearish gap below the 6600-6620 resistance. However, the gap was quickly filled and buyers took control to break through this resistance and Friday’s value area. The price then consolidated between this 6600-6620 resistance, which became support, and the 6645-6650 resistance zone.

At the US open, the price continued its consolidation, reacting to every new update regarding the conflict in Iran. Investors remained cautious until the daily close around 6650.

This morning, the US index opened in Zone 2, just above the previous day’s VVAH. The price quickly returned to the previous day’s value area and even broke Monday’s VVAL to settle on the 6600-6620 support zone. The price is still within the consolidation zone, trapped between a single print created this morning at 6624-6630 and Monday’s single print at 6585-6590. These two zones will act as support or resistance to be filled should the price take a clear direction.

Regarding options, we observe significant put hedging at 6500, 6200, and 6000, indicating that investors have prepared for a potential sharp market decline. Call levels are more modest at the 6600 and 6800 levels.

All eyes will be on geopolitics and the evolution of the Middle East conflict, as this Tuesday marks the final deadline promised by Trump.

On the macroeconomic front today, we will have the durable goods orders data at 2:30 PM and the Atlanta Fed’s GDPNow at 4:00 PM.

Scenario 1 🟡: Upon rejection of the 6600-6620 support zone, the price could consolidate between this zone and the previous day’s high at 6660.

Scenario 2 🔴: Upon a break of the 6600-6620 support zone, the price could target the previous day’s low at 6567 and then the 6500-6520 support zone.

Scenario 3 🟢: Upon a break of the previous day’s high at 6661 and the 6650-6655 resistance zone, the price could target the 6690-6700 resistance zone.

Key Levels:

• 6820-6840 (Resistance Zone)
• 6760-6780 (Resistance Zone)
• 6690-6710 (Resistance Zone)
• 6661 (Previous day’s high)
• 6650-6655 (Resistance zone + open + VVAH-1)
• 6600-6620 (Support zone)
• 6567 (Previous day’s low)
• 6500-6520 (Support zone)
• 6455-6470 (Support Zone)

Market situation

Wall Street ended the day higher, with the Dow Jones rising 0.36% and the S&P 500 by 0.45%. Investors are closely monitoring developments in the conflict between the United States and Iran, particularly President Donald Trump’s threats regarding the reopening of the Strait of Hormuz.

Upcoming Economic Data

The US Department of Commerce is scheduled to release durable goods data for February, with forecasts predicting a 1% decline in orders. Consumer credit figures from the Federal Reserve are also expected.

Geopolitical Context

• Waiting for the Impact: Trump has threatened to destroy Iran “entirely” if the Strait of Hormuz does not reopen. Wall Street finished higher on Monday as traders “hope” for a quick end to the conflict, but the risk of a “sell the news” event is massive if the US response is violent.

Impact on Currencies and Commodities

• Crude Oil (WTI): It is testing market nerves at $111. Any drop below $108 will be perceived as a major buy signal for equities.
• Gold Safe Haven: Gold reached a record $4,796 per ounce. This is the #1 stress indicator to watch on your second screen.
• The US dollar weakened while the yen reached critical levels. Gold prices fell slightly as investors awaited clear signals on the situation in Iran.

Company News

Significant news includes the appointment of Hilary Maxson as CFO of Oracle, and the closing of an investigation into Tesla’s remote driving feature, deemed related to low-speed incidents.

Trends in the Private Credit Sector

Goldman Sachs reported low redemption demand in its private credit fund, contrasting with other asset managers who limited redemptions in response to an increase in requests.

Services (ISM) / The Specter of Stagflation

ISM Non-Manufacturing PMI (Mar):

• Actual: 54.0
• Forecast: 54.8
• Previous: 56.1

ISM Non-Manufacturing – Employment (Mar):

• Actual: 45.2
• Forecast: 51.0
• Previous: 51.8

ISM Non-Manufacturing – Prices Paid (Mar):

• Actual: 70.7
• Forecast: 67.0
• Previous: 63.0

-> The Finding: This is an extremely toxic report screaming “stagflation.” Overall services activity is slowing more than expected. But the real alarm signal comes from the divergence in sub-components: employment is collapsing into strict contraction territory, meaning service companies are starting to lay off workers massively, while the “prices paid” component literally shatters expectations. Companies are paying much more while cutting positions.

Summary

• The Worst of Both Worlds: This is the very definition of stagflation. The services economy is destroying jobs while its operating costs soar, which will inevitably erode corporate margins.

• Impact for the FED: This is an absolute nightmare for the Federal Reserve. Its hands are tied: it cannot lower rates to stop the employment hemorrhage because services inflation is out of control, but if it keeps rates too high, it will drive the labor market into a wall.

• Market action: This poisonous cocktail is a powerful sell catalyst for equity indices, which hate seeing margins threatened by inflation and growth collapsing. Conversely, it is a prime buy signal for Gold.