QuiCQ 25/03/2025
Bulls, Bears 'n Pigs
"Bulls make money, bears make money, pigs get slaughtered."
— Wall Street Adage
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Massive, non-negligible rally in US stocks yesterday, lifting the S&P 500 and the Dow Jones 30 Industrial index above their respective 200-day moving averages. Excuses Reasons cited for the rally where an unexpectedly strong services PMI report and comments from Donald Trump suggesting that reciprocal tariffs due to take effect next week may be somewhat watered down.
Ten out of eleven sectors printed green, utilities being teh only ‘dissident’ and approximately 85% of stocks in the S&P 500 were up on the day, leaving the market heat map looking like a sea of green:
Yesterday was an important win for the bulls, also in the context of today’s Chart of the Day, BUT … we would not call it a full victory quite yet.
Swapping the S&P 500 index with the SPDR S&P 500 ETF tracker (SPY) for a moment, we note that
the 200-day MA is not fully broken (also true for the equal-weight version of the index - RSP)
$575 is the 38.2% retracement of the August lows to the February 19th highs
$575 is the 38.2% retracement of the February 19th to March 13th low
$575 was the reaction low of the sell-off into January 13th
on the SPY.
The following snippet proves that the more speculative corners of the market where the ones more searched for yesterday:
With so much excitment for risky assets it is no wonder that the more defensive stuff got dumped in favour of the former. Point in case, treasury bonds, which saw their 10-year yield close outside its most recent trading range:
In terms of bond prices, the equity rally of the past few sessions looks like this (via TLT):
The SU Dollar has shown some strength since mid-last week, but definitely not something to write home about (yet). Here’s the Dollar Index (DXY) for reference:
Gold, “au contraire”, has seen some weakness over the past few sessions, probably not least due to the fore-mentioned Dollar strength:
And finally, one commodity that has not cared about a strong USD over the past sessions is Oil, which found a bottom about two weeks ago and has started rallying with an acceleration yesterday, likely due to Trump imposing a 25% tariff on all oil coming out of Venezuela:
Asian stocks are generally a bit lower this early Tuesday morning, as are index futures on both sides of the Atlantic.
Time's up, more tomorrow - May the trend be with you!
Further follow-through from equity bulls is crucial here, as the following chart demonstrates:
