Are we there yet?
The S&P 500 Futures are down 50 points and that brings us back to almost our March lows at 5,500 and we’ll see where we end up for the day – and the Quarter. S&P 5,500 is 400 points below the 50-day moving average and 400/50 is 8 so we’re dragging that line down 8 points per day and there’s 140-days between the 50 dma and the 200 dma so – at this level, the 50 dma will death-cross below the 200 dma by the end of the month AND THAT WOULD BE BAD!!!
See how easy TA is?!? Now, I know this chart LOOKS oversold but it’s the daily chart and, if we zoom out to the Monthly Chart – we can see that we are still MASSIVELY overbought – even if we pretended what the Trump Administration was “normal” and not a drastic re-alignment of economic policy that’s likely to cause a MASSIVE Recession with these proven (over hundreds of years) disastrous tariff protectionism while dismantling the Government – removing the very safety net that is meant to prevent Recessions from turning into Depressions:
Now, if this were a normal monthly chart of the S&P 500 and we were applying the 5% Rule™, I’d be saying that, after running up 100% from 2,000 after the Financial Crisis, to 4,000, which kind of held up during Covid, we then popped 50% to 6,000 on $1.7Tn of Biden stimulus and low Interest Rates from the Fed and $8Tn in debt and another $8Tn added to the Fed’s Balance Sheet and THAT is how the market outperformed it’s 50-month moving average (one Presidential term) by 33%.
Given that Trump plans to raise prices for US Consumers (70% of the Economy) and cut Government Spending (20% of the Economy) and MAINTAIN (not increase) tax breaks for Billionaires and Corporations while dismantling the social safety net for their workers – one might conclude that tough times are ahead for the working class – even if we weren’t mobilizing an army to hunt down, capture and deport 10% of them.
When the Nazis went through Germany and their other occupied territories (Greenland? Canada?) looking for Jews, Gypsies, Homosexuals and other “undesireables” they went house to house and questioned EVERYBODY because that’s what you have to do to have a proper racial cleansing. President Trump will follow that model and ICE will have to go from Business to Business and perhaps house to house in order to round up the immigrants – so get used to hearing the phrase “Papers please” wherever you go – especially if you don’t look white enough to be an American.
And let me tell you, nothing makes a shopping trip more exciting than knowing you might not come home from it or sending your kids to school for what may be the last time! Other countries are already issuing travel advisories against going to the United States and we are only just getting started at being unwelcoming!
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Worksite Raids: ICE has revived large-scale operations, entering businesses to detain undocumented workers. Trump’s 2019 Mississippi raids arrested 680 people, destabilizing local economies and families 8. -
Rescission of Protected Areas: ICE now operates in sensitive locations like schools, hospitals, and churches, increasing community fear 15.
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Document Demands: Green card holders and visa applicants face heightened scrutiny, with reports of detainments over minor offenses (e.g., a decade-old marijuana charge) 5.
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The Administration’s focus on “sanctuary cities” and visa restrictions for predominantly Muslim/African nations 5 6 has led to de facto racial profiling. For example, a French researcher was barred entry after officials found critical messages about Trump on his phone 6.
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Travel Advisories: Germany, the UK, and others are warning citizens about U.S. border practices, citing arbitrary detainments and deportations 6.
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Reduced immigration could lower GDP growth by 30–40 basis points, exacerbating labor gaps in agriculture, construction, and healthcare11 14.
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Small businesses report record inflation concerns (58%), partly due to tariffs and workforce instability 13.
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Immigrants avoid hospitals and schools due to ICE’s presence, worsening public health 15 and they avoid the police – allowing crime to run rampant in their communities.
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The economic and humanitarian costs are significant and growing. As international allies issue travel warnings and businesses brace for labor shortages 6 11 13, the policies risk isolating the U.S. economically and morally.
So, unless there is a SIGNIFICANT change in policies by the Administration or unless we have SPECTACULAR earnings from the Corporations who have been issuing warnings to us all month long – it’s more likely the long-term market pullback continues and, using the 5% Rule, we can see where the lines of support and resistance should be drawn on that chart:
The NYSE is 600 points (3.1%) above making a new low, the Russell is 40 points (2%) above making a new low and WHAT is going to stop the slide with Tariffs going into effect on Thursday? The market is engaging in “magical thinking” – that Trump can’t possibly mean what he says because what he says is MADNESS!!! But MADNESS!!! is what’s been going on for the past 70 days and he has 1,391 days left AND he wants to get a 3rd term after that – good luck to us all!
The S&P is opening at 5,520(ish) this morning, not very far from the Strong Bounce Line, which is 12% off the Feb top – just 6 weeks (42 days) ago – and it’s only day 70! “WHAT is going to change?” Is the question you need to ask yourself as an investor. These are, after all, the conditions we are investing into. Be VERY careful out there – and don’t forget your papers!
We only have 5 Fed Speakers to guide us this week and 4 of them are stuffed around Friday’s Non-Farm Payroll Report, which is projected to have created 145,000 jobs – already down 39.5% from Biden’s 240,000 average and DOGE cuts would have made it closer to zero had not the courts stepped in (for now) to save hundreds of thousands of jobs.
This morning (10:30) we’ll et the Dallas Fed and pre-tariff Farm Prices come at 3. Tomorrow we get PMI, ISM, Construction Spending and JOLTS and Wednesday we’ll see Motor Vehicle Sales, ADP and Factory Orders with Kugler wrapping up the day. Thursday Trump’s Tariffs officially go into effect and then it’s PMI & ISM Services with Jefferson and Cook making comments and then it’s Non-Farm Friday when we get the Payroll Report, which will then be spun by Barr and Waller – fun!
And we STILL have earnings. Some are late Q4, some are early Q1 but, either way, they’ll be interesting as we warm up for the big event, when the Big Banks start reporting on April 11th – only a week from Friday!
“First they came for Perkins Coie,
And I did not speak out—
Because I was not a lawyer there.
Then they came for Paul Weiss,
And I did not speak out—
Because I did not represent Trump’s opponents.
Then they came for Columbia University,
And I did not speak out—
Because I was not in academia.
Then they came for Paramount and CBS,
And I did not speak out—
Because I was not in media.
Then they came for companies with diversity programs,
And I did not speak out—
Because I did not work in DEI.
Then they came for me—
And there was no one left
To speak out for me.” – Adapted from Martin Niemöller
