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Good Tuesday Morning, MPTraders! October 14, 2025-- Pre-Market Update: Equity markets are under pressure again from geopolitical event risk. ZeroHedge has a succinct description this AM: -- Global equity futures slipped on Tuesday after China vowed to "fight to the end" in its trade war with the U.S., following President Trump's threat last week to impose 100% tariffs on Chinese goods. Despite Washington's attempts to soften its tone over the weekend, tensions are intensifying into the new week: both countries are imposing new docking fees on each other's vessels, signaling deepening Sino-US relations ahead of Trump-Xi talks.
After being so stretched to the downside in Friday’s decline, it was not hard to expect a bounce to develop early this week. But, the question with then be how the market pulls back from this bounce?Well, thus far, the pullback has been corrective. And as I noted in the weekend update, until the market provides to us an indication that it will continue lower, we are forced to continue looking higher.Another wrinkle in our charts is that the ES dropped a bit further than the SPX, which does cause a bit of complication.
After continuing briefly higher following yesterday's close, futures began to roll over during the overnight trading session, ultimately retracing the majority of yesterday's gap up from the Friday afternoon low. As discussed this morning, price followed the expectations that Avi laid out for a wider flat b-wave, filling out the wave B of b into the low made this morning and rallying strongly since in what should be wave C of b.
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