The Market Just Turned Over Again... (More at 8:45 ET)

After a brief push above its 20-day moving average, the S&P 500 reversed quickly on Wednesday. Now, the bets are getting big against the financial sector.

Take Me to the Live Show at 8:45 EST

Good morning, Traders.

Blink and you'll miss it.

That was the case with yesterday's fast-paced market slump. As I warned, the funds could pull the rug at any moment. And there it was… fast and furious.

The tariff worries became the headline story.

But the real story - as Brandon Chapman laid out at TheoTrade yesterday - was the flurry of put options building against the financial sector.

Just a reminder: a put option ("put") is a contract offering the buyer and owner the right to sell an underlying security at a predetermined price ("strike price") on or before a specific date ("expiration").

The seller sets the date, price, and premium of the contract. The buyer pays that fee or premium to purchase the contract from the seller. Each contract covers 100 shares of an underlying stock or ETF.

The Financial Select Sector SPDR (XLF) bounced off its 50-day moving average yesterday. And now there are deep questions about the money markets and banking reserves as we head into tax season. How big could the drain be in the weeks ahead?

Are investors hedging against risk with the banks… or are some traders taking aggressive bets against the financials?

Brandon will explain what he's seeing and how you can take advantage of this stunning change in direction in the market… We'll also get a sneak preview of his live event on Friday, which will alter the way you see the markets in the months ahead.

But that's not all that's on tap this morning…

Here's What's Coming Today

The Tradable Headline: S&P Global Ratings anticipates that Americans will slash spending and said the odds of a recession sit at 25%. Blame the tariffs. Blame the weakening market. Blame Janet Yellen's stimulus.

However, be aware that a recession would likely lead to a bigger selloff this year until the Federal Reserve sees the need to support the financial system.

Your Daily Tune-Up: Auto stocks are under pressure, money isn't rotating to value right now, and almost 70% of all stocks are trading under their 50-day moving average. In low volumes and low expectations, we're looking for volatility to increase as we enter the second quarter, push toward earnings season, and await what happens when tax payments start to drain the Money Markets. Giddy up.

Gold Chatter: Is the top in for gold? Goldman Sachs (GS) has hiked its year-end forecast for gold to $3,300. Ladies and gentlemen, as we enter the second quarter, we may look at a short-term top for materials and precious metals. I'll outline what we see in the gold market and what we need to watch in the coming week.

You gotta join us… before Brandon comes on at 9 am.

The State of S&P 500 Momentum

As I said… blink, and you'll miss…

The BMO REX MicroSectors FANG+ Index 3X Leveraged ETN (FNGA) - a key confirmation signal - slumped back under its 20-day moving average.

Yesterday, we saw a big reversal after the return to equilibrium.

Back when buying pressure matched up against selling pressure - one for one.

But now, funds are selling into the gains (as we warned). It all confirms what we've discussed here at TheoTrade the last week, including Don's warning about low volumes and a lack of buying and confidence.

After a near 5% pop since our lows on March 13, the markets are back under pressure. Now is not the time to panic.

Instead, it's time to revisit yesterday's conversation about covered calls, sensible options, and strategies to generate income and take what the market is giving you.

I'll see you in the room.

Stay Positive,

Garrett Baldwin