{"id":12383,"date":"2025-04-04T06:53:02","date_gmt":"2025-04-04T06:53:02","guid":{"rendered":"https:\/\/alchemymarkets.wpengine.com\/?post_type=market_insights&p=9781"},"modified":"2025-05-16T08:07:55","modified_gmt":"2025-05-16T08:07:55","slug":"sp-500-tariffs-april-2025","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/it\/education\/market-insights\/chart-of-the-day\/sp-500-tariffs-april-2025\/","title":{"rendered":"S&P 500 Gaps Down By 71.95 Points: New Key Zone Formed"},"content":{"rendered":"\n

The S&P 500 index has gapped down by 71.95 in response to Trump\u2019s tariff announcements.<\/p>\n\n\n\n

Although the administration painted the tariffs as comparatively modest\u2014alleging they\u2019re half of what the U.S. faces abroad\u2014markets interpreted the move as a provocative escalation.<\/strong> Traders priced in the risk of retaliatory measures and broader disruption, leading to a sharp selloff on the S&P 500 along with the broader market.<\/p>\n\n\n\n

This forms a technical gap that traders must watch closely \u2014 either for a clear sign of rejection, or the potential formation of an exhaustion gap that could flip into support, much like the price action seen in August 2024.<\/p>\n\n\n\n

Market Gaps Tell the Tale on S&P 500<\/strong><\/h2>\n\n\n\n

A new market gap just formed between $5,499.53\u2014$5,571.48,<\/strong> which will act as a key level of resistance if revisited. The resistance is also strengthened by a freshly broken, significant trendline support, formed since April of last year. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Looking back, we\u2019ll notice that gaps in the chart, in conjunction with the trendline, and divergences on the RSI (in blue)<\/a> and Stochastics (in orange)<\/a> have always told an interesting tale on the S&P 500.<\/p>\n\n\n\n

What we\u2019ve found is that when a gap occurs, it tends to act as a key zone. The trendline has proven its key role as a bias filter<\/em><\/strong> (when price is above, shoot for longs, and when below, shoot for shorts), and the divergence helps anticipate a continuation or reversal:<\/p>\n\n\n\n

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August 2024 Gap Down Analysis<\/strong><\/div><\/summary>
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  1. Notice how the gap downs occurred above the trendline<\/strong>, reducing the probability of larger bearish declines.
    <\/li>\n
  2. Following a hidden bullish RSI divergence<\/a> and uptrending Stochastics, the S&P flipped the gap zones into exhaustion gaps.
    <\/li>\n
  3. After flipping into support, the S&P bounced on the second gap, continuing the broader uptrend.<\/li>\n<\/ol>\n<\/div><\/details>\n
    November 2024 Gap Up Analysis<\/strong><\/div><\/summary>
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      \n
    1. Notice how the gap up occurred above the trendline<\/strong>, increasing the likelihood of the gap playing as support.
      <\/li>\n
    2. Following regular bullish RSI divergences<\/a> on both the RSI and Stochastics, the gap managed to provide support thrice.
      <\/li>\n
    3. Finally, when the price broke down from the gap, the region served as a resistance zone, highlighting its role as a key zone.<\/li>\n<\/ol>\n<\/div><\/details>\n<\/div>\n\n\n\n

      The Rundown: Most Recent Gap Down on S&P 500<\/strong><\/h2>\n\n\n\n
      \"\"<\/figure>\n\n\n\n

      With the recent gap down, here\u2019s the story unfolding:<\/strong><\/p>\n\n\n\n