1. Moving the market

Equities continued their recovery from the recent selloff, buoyed by some positive economic data.

However, late-session uncertainties led to a red close for the major indexes, as concerns grew that the Fed might not be able to significantly cut rates in 2025 due to potentially inflationary trade tariffs starting on “Liberation Day,” April 2nd.

Some traders believe these economic concerns are exaggerated. Fed Chair Powell stated that the economy is “strong overall” and that his policy is “in a good place” to respond to any signs of weakness. He also described the potentially inflationary effects of tariffs as temporary.

Sales of existing homes in February rose 4.2% from January, defying expectations of a 3% drop. Jobless claims increased only slightly from last week, with layoffs remaining low. However, Leading Indicators fell to their lowest level since November 2016, as noted by ZH.

After an early bounce, the Mega-Cap tech sector reversed yesterday’s gains, mirroring the pattern of the most shorted stocks. Bond yields were mixed, rate cut expectations rose, and the dollar advanced.

Despite the dollar’s gains, gold closed higher, reaching the $3,050 level. Bitcoin surged early on but gave back its gains late in the session.

Today’s trading was largely uneventful, but the positive takeaway is that we are nearing the end of the seasonally weakest period of the year.

Will April align with its historically bullish trend?

1. Moving the market

In anticipation of the Fed’s policy announcement, equities climbed higher early in the session and continued their upward trend, joined by bonds, gold, and cryptocurrencies.

While no change in rates is expected, traders are keen to hear the Fed’s outlook on two potential rate cuts this year. They will also be listening for insights on how the Fed evaluates the current economy, given the trade tensions created by tariffs.

Alongside the interest rate decision, Fed Chair Powell commented on GDP, inflation, unemployment, and the possibility of “stagflation.” His remarks were both dovish and hawkish, but traders interpreted them positively, leading to a broad market rally.

Powell also addressed Trump’s tariff agenda, stating that tariff inflation can be transitory if inflation expectations are anchored.

The most shorted stocks were squeezed for the third time in four days, bond yields retreated, rate cut expectations increased, and even the dollar ended slightly higher despite a midday dip.

Gold surged above $3,050, Bitcoin approached $86,000, and crude oil recovered some of its previous losses.

It was a strong comeback day for all markets, with our domestic TTI now close to crossing back above its long-term trend line.

Is the bull market about to resume its trend again?

1. Moving the market

The two-day comeback rally hit a brick wall today, with the major indexes retreating, led by the Nasdaq.

Tesla was one of the hardest-hit stocks, falling over 5% after an analyst lowered its price target due to rising competition in the EV space. The company’s stock has declined about 36% over the past month.

The S&P 500 officially entered correction territory last week, dropping 10% from its recent high. It now sits on the cusp of either breaking out to the upside or breaking down further. The three major indexes are down year-to-date and have been outperformed by gold, which has gained almost 15% over the same period.

Traders are anxiously observing the Fed’s two-day policy meeting, which concludes tomorrow afternoon with a press conference. Current odds are 99% that the central bank will hold rates steady, despite wishful thinking on Wall Street that the recent “growth scare” might sway the Fed to lower rates.

Offsetting that scare somewhat were positive housing starts and record-high industrial production, though rising import prices have dampened expectations for a rate cut. Big tech stocks took a dive today, bond yields were mixed, and the dollar swung wildly before ending only modestly lower.

Gold continued its strong performance, advancing deeper into the $3,000 territory, while Bitcoin lost its footing and fell back to the $81,000 level.

All eyes are now on the Fed’s announcement on interest rates tomorrow, but traders will be closely analyzing Fed Chair Powell’s commentary to determine if we are facing a “risk on” or “risk off” scenario moving forward.

1. Moving the market

Equities rose early in the session as major indexes attempted to build on Friday’s recovery from correction territory. The latest retail sales report showed a 0.2% increase for February, which, although below the estimated 0.6% rise, relieved traders as the outcome was not worse.

Last Thursday, the S&P 500 entered correction territory, dropping more than 10% from its February high. Dip buyers stepped in on Friday, driving the index 2% higher and helping us delay our “Sell” signal.

Despite this, anxiety persists as traders struggle to keep up with Trump’s rapidly changing tariff policies and the cost-cutting efforts of the DOGE department, which impact the economy and corporate and consumer confidence.

The biggest 2-day short squeeze since last July helped stocks stay on an upward path, despite mixed bond yields. Gold bounced against its $3,000 overhead ceiling and managed to close above it, while the dollar broke below its recent trading range.

Bitcoin exhibited its usual volatility over the weekend, first falling to $82k before rebounding to nearly $85k.

Our domestic Trend Tracking Index (TTI) surged during the past two sessions, recovering almost all losses from the recent sell-off. See section 3 for more details.