The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
200-day moving average.
Bulls went to work overnight and S&P 500 futures were around +40 at midnight. They climbed further in the early morning and the index opened +60. The index rallied immediately in the regular session and he bulk of the day between +80 and +95. The Mag7 led the market higher today with Tesla’s performance being notable, up more than 10% today. Tariff talk inspired the bulls to make their moves as President Trump made comments that he might give “a lot of countries breaks.” Yields climbed across the curve and Fed interest rate cuts for 2025 fell by 9 bips, a large change.
Markets embraced the comments from the President and piled into stocks. If tariffs won’t actually happen, the recent decline in the market becomes the tastiest dip, dip-buyers could ever buy. Once they got going, they broke above the 200-day moving average (5752). For chart-followers, that’s a sacred level and will inspire significant bullish momentum. That becomes the first confirmation that the bounce was real and that the bull is back. If most sidelined bulls view that price action accordingly, hold on to your hats. Every penny they wanted to put to work, but were too nervous to deploy, will be shot out of their trading accounts toot sweet.
This upside frenzy may be all for naught of course. The actual tariffs are supposed to be announced, and presumably implemented, on April 2nd. That’s Liberation Day according to the President. If the tariffs have substance, GDP will be affected and all this trading optimism will be dashed. It leaves the longs in a speculative position. They are banking on the announced tariffs *next week* being essentially for show rather than true impediments to trade.
It’s quite a flyer and the risk of the gambit is being hidden by the chart. Bulls see the tape popping above the 200-day and the conclude that we’re in the clear.
If only it were so easy.
See you tomorrow.
-Mike
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