OP Wire 5/5 (OP – Lite)

By Steve

Monday, May 6, 2025 – “Straightforward Structure, Wild Headlines”

The markets closed strong last week, with the major averages climbing on the back of stronger-than-expected April job growth, even as the unemployment rate held steady at 4.2%. But beneath the surface, traders saw deeper signals: the Commerce Department’s data revealed that Q1 GDP contracted—blamed largely on a tariff-driven import surge.

That tariff narrative continues to dominate. Over the weekend, China signaled interest in opening talks on President Trump’s 145% levies, which Beijing countered with 125% retaliatory duties. While headlines may sway sentiment, OptionsPlayers traders know that price structure always tells the truth.

Global Headlines Driving Early Action

President Trump’s new 100% tariff on foreign films is already hitting media stocks. Premarket, Netflix (NFLX), Disney (DIS), and Warner Bros Discovery (WBD) all traded lower.
Berkshire Hathaway Class B shares dipped after reporting a 14% drop in Q1 operating earnings due to California wildfire insurance losses. CEO Warren Buffett also announced he’ll step down at year’s end, passing the reins to Greg Abel.
Oil majors like Phillips 66 (PSX), Exxon Mobil (XOM), and Chevron (CVX) fell as OPEC+ announced a 411,000 barrel/day production increase starting in June. Oil prices responded accordingly—Brent down 1.2%and WTI down 1.4%.
Big tech weakness: The “Magnificent Seven”—including Amazon, Nvidia, Meta, Microsoft, Apple, Alphabet, and Tesla—showed softness in premarket action. With $QQQ near key resistance, it’s something we’re watching closely.
Spotify (SPOT) downgraded to “reduce” by Phillip Securities.
Hims & Hers Health (HIMS) climbed ahead of earnings.
Newmont Corp (NEM) gained with gold, which is rising on a weakening dollar.

Technical View: Clean Price Action, Strong Structure

Last week we emphasized watching the 19,350 level—a major change-of-character zone on the daily. It held as support all week, and Friday saw a high of 20,276.75, just shy of our next resistance level at 20,500. A perfect textbook reaction.

As we head into a new week, the focus is on how price behaves around the 20,000 level. This is now a pivotal spot, especially after April’s monthly candle closed as a hammer—a classic reversal signal indicating renewed buyer strength.

This Week’s Levels of Interest

Upside Targets:
→ 20,500
→ 20,900
→ 21,500

Downside Levels to Watch:
→ 20,000
→ 19,500
→ 19,350
→ 19,000

$QQQ Tech Index – Melt-Up or False Move?

The $QQQ closed at 488.83, sitting just under the 200-day moving average near 490. If mega-cap tech stocks (AMD, MSFT, NVDA) help push sentiment higher, we could see squeeze candidates explode. We’re looking at resistance near 493.7, followed by a push toward the key 500 psychological level.

Support levels: 485 and 480
Above 490 = game on. Below 480 = caution required.

Economic Data & Events This Week

Today:

9:45 AM ET – S&P Global Services PMI (Apr)
9:45 AM ET – S&P Global Composite PMI (Apr)
10:00 AM ET – ISM Non-Mfg. PMI (Apr), Employment, Prices
1:00 PM ET – 3-Year Treasury Note Auction

Wednesday: FOMC Decision
Thursday: Jobless Claims

Earnings to Watch This Week

Tuesday: Advanced Micro Devices (AMD)
Wednesday: Disney (DIS), Uber (UBER)
Thursday: Coinbase (COIN), Shopify (SHOP)

OP Chat Playbook: NFLX Puts Print Big

Last Friday in chat, we mentioned how attractive NFLX puts were—and we took the position that afternoon. Today, they’re printing big. Once again, the system wins. Chat pays.

Final Note: Stay Focused on Structure

It’s easy to get swept up in headline noise: tariffs, oil production shifts, Buffett’s retirement, global PMI data, or unexpected earnings reactions. But as OptionsPlayers teaches in every course system, only price pays.

As long as we continue to see structure hold above key inflection points—and confirmation from volume and momentum—our playbook remains long-biased with tight structure.

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