Market Recap – May 14th, 2025
The Philosopher Investor
"The greatest glory in living lies not in never falling, but in rising every time we fall." – Nelson Mandela
🧭 Market Snapshot
So, the market's a bit on edge because we're digesting some key economic signals. Earlier this week, we got a look at inflation with the Consumer Price Index, which showed a slight cooling.
Today, Wednesday, we're hearing from some Federal Reserve officials, including Vice Chair Jefferson and Governor Waller, and Cisco is reporting earnings. Investors are always keen to hear what Fed members are thinking about the economy and interest rates.
Then, later this week, we've got more important data coming out – specifically the Producer Price Index and Retail Sales figures – plus Fed Chair Powell is scheduled to speak, and we'll see earnings from big retailers like Walmart.
Basically, it's a busy week with fresh inflation numbers, updates on consumer spending, and insights from the Fed, all of which can definitely stir things up in the market.
Overall Price Context & Current Action: The SPY is currently trading around the 587.27 level. This indicates that the market is, at this moment, showing little net change from yesterday's close, continuing the pattern of tight consolidation. The price action remains confined below the 590.00 resistance and above the 580.00-582.00 support zone, highlighting ongoing indecision.
Key Levels & Indicator Insights:
Support: Immediate support continues to be the 580.00-582.00 area. If this level is breached during today's session, the next areas to watch are the green line on the chart around 572.00, and then the red line near 562.00.
Resistance: The 590.00 level remains the immediate upside barrier. A sustained move could target the 600.00 psychological mark, with further resistance anticipated in the 605.00-610.00 zone (Volume Profile POC).
Volume: Current intraday volume should be monitored in relation to its typical levels for this time of day. A significant increase in volume accompanying a break of key support or resistance would lend more conviction to the move. So far, volume appears consistent with the recent pattern of being below its moving average, suggesting a lack of strong directional impetus.
Bullish Scenario: A decisive push and hold above 590.00 on increasing intraday volume would be a positive sign, potentially leading to a test of 600.00.
Bearish Scenario : A break below the 580.00-582.00 support on rising intraday volume would signal potential for further downside, with targets at 572.00 and possibly 562.00.
Current Bias/Decision Point : The market continues to coil within the 580.00-590.00 range. Traders are likely awaiting a catalyst or a more definitive move out of this tight consolidation. The key decision point remains whether buyers or sellers will take control and push the price decisively out of this range, with volume confirmation being crucial for any ensuing breakout or breakdown.
The VIX futures term structure continues to exhibit contango across the front and mid-term, though with subtle shifts from yesterday. The front-month (May) future is now at 18.150, a marginal decrease, while the VIX Index itself has ticked lower to 17.88. The curve maintains an upward slope through November, peaking at 20.370 for the November contract, slightly below yesterday's peak. Notably, the far end of the curve shows a slight flattening and a hint of backwardation between November (20.370) and December (20.190).
Compared to yesterday's "deepened contango" and "consistent upward slope," today's structure, while still predominantly in contango, suggests a slight moderation in the build-up of future volatility expectations, particularly in the longer-dated contracts. The continued low level of the VIX Index and the front-month future reinforces the ongoing risk-on sentiment. However, the flattening at the far end of the curve could imply that while near-term comfort persists, the conviction about an ever-increasingly calm longer-term outlook might be seeing its limits, introducing a slightly more nuanced view than yesterday's broad easing of anxieties. The market still appears comfortable with the near to mid-term, but perhaps with a touch less aggressive optimism about the longer horizon.
🔥 Trade Ideas
No trade should be taken since the market is really overbought, but this ticker appeared in my screener.
1/ KDOK
KDOK has recently shown a significant spike in buying interest, bouncing sharply off its lows with notable volume. This suggests a potential sentiment shift and accumulation in this name.
Currently, KDOK is trading around $6.23. Key support is visible near the recent swing low at $5.80, with a more substantial support level around $5.40. The stock is now looking to overcome resistance from the recent highs in the $6.70 - $6.80 area. The surge in volume on the recent upward move, particularly the large green candle a few sessions ago and the volume spike on the most recent candle, is encouraging for bulls.
With this positive momentum, a bullish trade could be considered on a decisive daily close above the $6.80 resistance. An entry could be eyed around $6.85, with a stop-loss placed near $5.75 (below the recent support).
😅 Meme of the Day
