Good morning, traders…
Wednesday was “Liberation Day,” which sounds more like a Marvel sequel than a market-moving event.
But as many expected, it proved to be the latter…
President Trump announced a blanket 10% tariff on all imported goods. But it didn’t stop there. China got slapped with 34%, the European Union with 20%, and the list goes on…
These numbers were way more aggressive than analysts expected, and the market tanked in after-hours.
The Nasdaq dropped more than 4% overnight:
Risk came off fast, the VIX jumped, and sectors tied to imports — retail, consumer goods, semiconductors — took massive hits.
This market is no cakewalk. And following “Liberation Day,” it might get even more unpredictable.
But if you’ve been trading with me for any amount of time, you know the drill: When the VIX spikes, we don’t freak out — we stay small, we stay nimble, and we let the setups come to us.
So let’s break down the reaction to Liberation Day: what’s happening, which names I’m watching, and why I went heavy on puts (something I rarely do)…
Market Internals and Tape Talk
If you were with me in the live room on Wednesday, you heard me say it: “When the VIX is high, we stay small and nimble.”
That’s the rule. It’s not exciting, but it keeps us solvent.
The VIX jumped on Thursday. Market internals were weak. And the major index price action rolled right off the 8 and 21 EMAs — again.
If you were following the rules, you shouldn’t have woken up with major pain in your account. You should be hedging your account so that it can withstand the volatility — no matter what happens.
Markets don’t owe us anything, and they certainly don’t care about how confident we were the night before.
So we adjust. We move with them. And when volatility spikes, we reduce size and pick our spots carefully…
Until we get two strong closes back above those key moving averages, we don’t assume anything’s changing. We let the tape prove it. Anything else is guessing.
Same thing on SPY. If it holds $540, maybe we get a sustained bounce. But below that, the next support is at $528.
That’s classic bearish structure, and we play it as such. Bearish charts get bearish trades. Period.
The Tariff Trade: Why I Went Short
Speaking of bearish trades…
Some people have been asking why I went heavy into puts on Wednesday.
I didn’t call it out in the live room because we don’t typically trade indexes in my services. That requires a whole different rhythm.
But I still want to walk you through my thinking, because it might help you sharpen your own speculative chops.
I bought SPX puts due to three simple pieces of logic:
- The market does not like tariffs. We’ve seen it time and again—tariffs increase costs, rattle sentiment, and often hit consumer-facing stocks hardest.
- We knew tariffs were coming. The news was public. The political drums were already beating.
- And let’s be honest—Trump doesn’t do “mild.” When he makes an announcement, he swings for the fences. Whether you love him or hate him, his style is consistent.
So with all that in mind, I thought, “We’ve got elevated VIX, a bearish tape, and a headline that almost guarantees a reaction.”
That’s why I went short. And thankfully, it worked out.
4 Smart Money Setups I’m Watching
Now let’s talk about a few names from the OMEN Scanner I’m watching:
Core Scientific (NASDAQ: CORZ): This one’s a low-cost crypto-related name. It pulled back to previous support and held up okay, considering the market’s move. If it clears $8.25, I like the April 25th $9 calls.
Rocket Companies (NYSE: RKT): Quiet in the pre-market, but showing relative strength. If it gets above $14.25, I’m looking at the May 16th $16 calls.
Pfizer (NYSE: PFE): Flat overnight, which actually says a lot. When the whole market’s sliding and a stock just stands there? That’s relative strength. Over $24.80, I like the June 20th $25 calls.
It’s important to be cautious and short-leashed with calls in this market. But these could be calculated bets on names holding up better than the broader tape.
Stellantis (NYSE: STLA): Now, a put-buying opportunity. This stock is sitting in a textbook bearish flag. If it breaks below $11, I’m interested in the May 16th $11 puts. But if it bounces back to $11.50 and fails, that’s a possible re-entry point as well. Smart Money put volume was heavy there on Wednesday.
Where’s the Strength?
Energy and utilities continue to hold the line.
We’re seeing that in the Energy Select Sector SPDR Fund (NYSEARCA: XLE) and the Utilities Select Sector SPDR Fund (NYSEARCA: XLU), along with some pockets of consumer staples.
If you think about this critically, it makes sense. No matter what the economy’s doing, people still need to put gas in the car, pay their electric bill, and buy groceries. These are defensive names.
On the flip side, Nike (NYSE: NKE), Gap (NYSE: GPS), Crocs (NASDAQ: CROX), Restoration Hardware (NYSE: RH), and Wayfair (NYSE: W) were all down huge Thursday morning because they rely heavily on Asian imports.
This market is difficult, volatile, and emotional.
So we stay light. We stay disciplined. And we speculate where the odds are on our side.
That’s what trading is all about.
Be good and be good to others,
Ben
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*Past performance does not indicate future results
