The stock market had a choppy and largely negative day, with about 69% of S&P 500 stocks finishing in the red. Adapting to changing market conditions is key to long-term success, as the easy money-making environment of the bull market gives way to more challenging times.

The S&P 500 attempted to rally several times throughout the day, including during Fed Chair Jerome Powell’s speech, but was rejected each time. A key short-term support level to watch is the 502.50 area. A breakdown below this could open the door to the psychologically important 500 level and below.

In his speech, Powell noted a concerning lack of progress on bringing down inflation. This implies interest rates may need to remain higher for longer, which spooked the markets. The bearish price action and failure to sustain any rallies is a sign that money flows are turning increasingly negative.

Earnings season is ramping up, with Abbott Labs, US Bancorp, Las Vegas Sands, Alcoa, Discover Financial, and CSX among the notable companies reporting on Wednesday. However, Thursday is the main event, with heavyweight reports from Taiwan Semiconductor and Netflix.

Netflix in particular will be closely watched, as it has a history of making big post-earnings moves that impact the broader market’s sentiment. While not expecting anything on the scale of the huge drop in January 2022, the Netflix report could set the tone for tech earnings in the weeks ahead.

In other corporate news, AMD unveiled what it calls its most powerful chips yet for business PCs. Despite the seemingly positive announcement, AMD’s stock price reaction was muted, likely weighed down by overall market weakness.

The crypto market is eagerly awaiting the upcoming Bitcoin “halving” event, which is expected to occur sometime Friday evening. Some analysts are making bold predictions of Bitcoin surging to $100K or even $500K. As usual, take these prognostications with a grain of salt. The prudent approach is to react to Bitcoin’s price action following the halving, rather than attempting to predict the unpredictable.

Looking at specific stocks, Microsoft is vulnerable to more downside if it breaks below the $412 support level. NVIDIA is also ripe for a pullback, although it’s crucial to wait for confirmed momentum rather than anticipating a decline that may not materialize.

Tesla broke down through the closely watched $160 level and appears to be heading lower, with $150 as the next support zone to watch. On the upside, SE looks strong and could be buyable on a breakout above $57.20.

The $600K “big money” options trade of the day was in Walgreens Boots Alliance (WBA), with a large buyer of in-the-money $17.50 calls expiring in June 2024. This comes despite WBA being in its largest drawdown in history. The trade likely represents a contrarian bet on an oversold bounce from long-term support levels.

In conclusion, market conditions are shifting rapidly as the era of easy money appears to be in the rearview mirror. Successful traders will need to remain adaptable, vigilant, and disciplined with risk management to navigate the choppier waters ahead. With earnings season picking up steam and key economic events on the horizon, there should be no shortage of opportunities for nimble traders in the days ahead.