Trump signed a tariff order imposing a 25% tariff on imports from Mexico and Canada, except for a 10% tariff on Canadian energy products. Additionally, China will face a 10% tariff on top of existing levies.
In response, Canada has announced retaliatory measures, while Mexico is expected to reveal its response later today. China plans to challenge the tariffs at the WTO. As a result, the U.S. dollar and interest rates are rising, while U.S. equities are set to open sharply lower.
The Week Ahead The economic calendar is packed this week, beginning with the ISM Manufacturing Index on Monday. On Tuesday, the JOLTS report will provide fresh insights into the labor market, followed by the ISM Services Index on Wednesday, offering a key gauge of economic activity in the services sector. The main event of the week, Friday's jobs report, will shape market expectations for future Federal Reserve policy. Additionally, the University of Michigan’s preliminary consumer sentiment reading, also set for release on Friday, will provide further insights into consumer confidence and spending trends.

Earnings season will continue with notable names like Alphabet (GOOG)(GOOGL), Amazon (AMZN), Palantir Technologies (PLTR), Advanced Micro Devices (AMD), Walt Disney (DIS), and Qualcomm (QCOM) due to report results.

Market Regime
Last week, the trend was upward, forming a series of lower highs and holding above the Flip. The multiday upsloping structure connecting those lows was broken on January 31, which is a bearish signal, following a double-top formation near the all-time high.

The SPY 15-minute trend (including extended hours), defined by the 50-period moving average (white), was slightly upsloping for most of last week but has turned sharply downward in the premarket.

The Gamma Index (Dealer Gamma) has also turned negative—SPX at -140M and SPY at -900M—and is trading below our Flip level (Dealer Transition) of SPX 6060 and SPY 605. Below the Flip, bears are in control as dealers sell weakness and buy strength to hedge. This results in elevated volatility and destabilizing conditions.

Reference Price: 6040
Reference Date:Â 2025-02-03
Resistance: 6060 Flip, 6075, 6100, 6125, 6128 ATH
Support: 6020, 6000, 5960/5950, 5920 (SPY 590 Put Wall), 5900 Put Wall, 5870, 5830/5820, 5800, 5905 - 5842 Gap Zone

With bears in control to start the week, it’s best to bring out the negative gamma playbook, focusing on low-risk option structures and high-probability setups.
Volatility
Despite the tariff announcements, SPX implied volatility increased only a little bit. The Volatility Risk Premium is now slightly neutral, offering no clear advantage from a volatility perspective.

The VIX has proven last week to be highly effective in determining pivots: Levels remain unchanged: 12–12.7, 14.7–15, 18, 19.5, 22, and 23.5.

Trump's policies are putting upward pressure on the dollar and rates, which continue to be the main macro concern and are not positive for equities at this juncture.
Sustained upside is dependent on a volatility down (VIX down) environment and, to some extent, on a dollar-down, rates-down environment.
On January 30—and more notably on January 31—Trump's tariff announcement intraday triggered a sharp decline in U.S. equities and a bid in volatility. This remains a risk in the coming weeks and months.

A report from ScienceDirect analyzed 'Trump tweets' from his last term, highlighting market reactions and the tradable edge. Do President Trump's tweets affect financial markets?
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