GOLD SHINES AS EQUITIES SWING AND INFLATION HITS RECORD HIGHS
[Chart courtesy of MarketWatch.com]
Moving the market
The stock market experienced another volatile opening, with equities swinging sharply due to worse-than-expected consumer sentiment for April. The index dropped from March’s 57.0 to 50.8, significantly below the expected 54.6.
Inflation concerns surged, rising from 5% in March to 6.7% in April, marking the highest level since November 1981. Other survey measures also indicated deterioration.
However, Producer Prices saw the largest drop since the COVID-19 pandemic, with a 0.4% month-over-month decrease, bringing the year-over-year index down to 2.7%.
This week has been one of the most volatile in Wall Street history. Trade policy uncertainties have caused major indexes to remain solidly in the red for 2025, despite a rebound this week.
The US Macro Surprise Index, which had bounced off its lows in March, reversed and reached its weakest point since September. Financial conditions tightened dramatically, yet the Federal Reserve remained stoic and non-committal.
Gold emerged as the performance leader, achieving its best week since March 2020 amid rising bond yields. Rate-cut expectations plummeted as bond volatility surged, indicating underlying stress in the market.
The dollar experienced its worst two-week drop since November 2022, while Bitcoin had its best week since early January, potentially entering a strong period if historical liquidity trends hold true.
Out of the 1,800+ ETFs out there, I only pick the ones that trade over $5 million per day (HV ETFs), so you don’t get stuck with a lemon that nobody wants to buy or sell.
Trend Tracking Indexes (TTIs)
These are the main indicators that tell you when to buy or sell Domestic and International ETFs (section 1 and 2). They do that by comparing their position to their long-term M/A (Moving Average). If they cross above, and stay there, it’s a green light to buy. If they fall below, and keep going, it’s a red light to sell. And to make sure you don’t lose your shirt if things go south, I also use a 12% trailing stop loss on all positions in these categories.
All other investment areas don’t have a TTI and should be traded based on the position of each ETF relative to its own trend line (%M/A). That’s why I call them “Selective Buy.” In other words, if an ETF goes above its own trend line, you can buy it. But don’t forget to use a trailing sell stop of 12%, or less if you’re feeling nervous.
If some of these words sound like Greek to you, please check out the Glossary of Terms and new subscriber information in section 9.
DOMESTIC EQUITY ETFs: SELL— effective 4/4/2025
Click on chart to enlarge
This is our main compass, the Domestic Trend Tracking Index (TTI-green line in the above chart). It has broken below its long-term trend line (red) by -8.86% and has now moved into “Sell” mode as of 4/4/2025.
The link below shows all High Volume (HV) Domestic Equity ETFs. They are ranked by M-Index, which is my secret sauce for measuring momentum. Prices in all linked tables below are updated through 04/10/2025, unless otherwise noted. Price data not yet available at publication is indicated with 00.00% or -100.00%. Please note that distributions are not included in the current momentum numbers.
If the TTI is above the trend line, you can use the tables in the link below to pick your winners:
This is our global guide, the International Trend Tracking Index (green). It has broken below its long-term trend line (red) by -4.54% and has now moved into “Sell” mode as of 4/7/2025.
The list in the link below shows the High Volume (HV) International ETFs I track for you during a Buy cycle. They are also ranked by M-Index:
This is the mother of all lists, showing all ETFs I track and how they stack up against each other. The sorting order is by M-Index too. Momentum figures for all ETFs are not adjusted for dividends.
This is where you can find HV ETFs for specific countries or regions that I watch every week. Please note that the data in this table does not include adjustments due to distributions. Country funds can be wild beasts, so make sure you use a trailing stop loss (I use 10%) to protect yourself from nasty bites.
This is where you can diversify your portfolio by looking for different opportunities in various sectors of the market. The table of HV Sector ETFs in the following link covers a wide range of possibilities. The sorting order is by M-Index:
Here too, I recommend using a 10% trailing stop loss to limit your risk.
BOND & DIVIDEND ETFs: SELECTIVE BUY
If you like getting paid for holding ETFs, here’s a list of bond and dividend paying ETFs. But before you buy them, make sure you check their momentum figures first. Then you can visit your favorite financial web site to see their yield and other details.
Please note that the data in this table does not include adjustments due to distributions.
Please note that some of these funds try to beat the index they are tied to by a certain percentage. This can boost your returns, but it can also magnify your losses. So be careful and use a trailing sell stop (I suggest 10%) and be ready for some bumps along the way.
NEW SUBSCRIBER INFORMATION
To get a head start on more successful investing, please click on:
In case you missed it, you can download my latest e-book “How to beat the S&P 500…with the S&P 500,” here. If you are investing your 401k and must use mutual funds, I suggest you mainly stick with the S&P 500 as described in my book. Of course, you can always use the above tables to find sector or country ETFs that suit your taste and use the equivalent mutual funds as offered by your custodian.
Disclosure:
I must tell you that I, as well as my advisory clients, own some of the ETFs listed in the above table. Also, they are not meant to be specific investment recommendations for you, they just show which ETFs from my universe are doing well right now.
Equities resumed their downward trend after yesterday’s historic rebound, which was triggered by Trump’s 90-day pause on some reciprocal tariffs. The EU followed suit by announcing a similar pause on U.S. goods.
Despite this, a 125% tariff rate on goods from China remains, with Trump expressing optimism that “a very good deal” can still be achieved. However, the markets may not be out of the woods yet. While the delay might provide some relief, it does not reduce uncertainty, and market volatility is expected to remain high.
This morning, the tech sector experienced the steepest declines, with major players like Apple, Tesla, Nvidia, and Meta pulling back sharply. This follows the S&P 500’s 9% gain yesterday, its third-largest single-day increase since World War II.
The major indexes retraced more than half of yesterday’s gains before cutting losses somewhat by midday, as the dollar weakened, and yesterday’s short squeeze showed no follow-through.
Global uncertainty pushed gold prices to a record high, marking its biggest two-day gain since the COVID-19 pandemic. Conversely, Bitcoin gave up some of yesterday’s gains but managed to retake the $80k level, while bond yields closed higher.
This period of uncertainty, volatility, and confusion is underscored by the dollar being at its lowest in two years, while gold sits at a record level.
This is a good time to watch this debacle from the sidelines.
Despite intensifying global tensions, the markets edged into the green early on as traders sought a bottom after recent relentless selling.
Optimism persisted even as the European Union (EU) and China announced retaliatory tariffs on U.S. merchandise. China will impose an 84% levy starting Thursday, following U.S. tariffs of 104% on Chinese imports that took effect at midnight. The EU also approved its first set of tariffs on the U.S., starting on April 15.
Other countries joined in, announcing 25% retaliatory tariffs on U.S. vehicles. This ongoing tug-of-war has kept anxiety high on Wall Street, with the 4-day rout likely not over. The Dow has now fallen 19% from its highs.
Everything changed when Trump suddenly announced a 90-day pause on tariffs, initially dismissed as fake news on Monday but confirmed today. His 10% blanket tariff for all countries remains in effect, but he will need more time to negotiate with over 70 countries seeking direct talks.
In response, computer algorithms went haywire, pushing major indexes 8-12% higher, with the Nasdaq seeing its largest gain since October 2008. Remarkably, the S&P 500 experienced its largest ever point reversal yesterday, surpassing the record set on October 14, 2008.
While the comeback rally captured attention, the real drama unfolded in the bond market, where chaos reigned as price volatility hinted at potential malfunctions. The basis trade was in danger of blowing up, a complex concept beyond the scope of this summary, but you can read more about it here.
Bond yields spiked, especially the 2-year, the dollar retreated, Bitcoin surged past $82k, and gold had its best day since 2020.
Rate-cut expectations plunged, leaving this wild session with more questions than answers.
Hopes that tariff deals with many countries could be negotiated for mutual benefit provided a brief reprieve from recent market turmoil, bringing some calm even as tensions remained. The broad market bounced back sharply as news spread that around 70 countries had contacted the U.S. to discuss alternative proposals.
After three days of steep losses and violent volatility, including the highest trading volume in 18 years and a brief dip into bear market territory (-20%), any easing of trade tensions was bound to create a relief rally. This is what we witnessed this morning, but it remains to be seen if this marks the end of the sell-off or just a temporary respite.
Unfortunately, U.S. stocks suffered a major reversal as tariff rhetoric between Trump and China intensified, pulling the indexes not only off their lofty levels but deep into the red, confirming that we indeed saw a dead cat bounce. Trump confirmed an additional 104% of tariffs on China, set to take effect at midnight, which crashed the offshore Yuan to a record low against the dollar.
The massive short squeeze, which had propelled the S&P 500 to rally 4% intraday, ended abruptly with the index closing down over 1.5% and losing its $5,000 level. Meanwhile, the Mag7 basket also suffered, having lost $5.3 trillion in market cap since its peak.
Bond yields rose, the dollar remained steady, but credit markets are starting to crack and are at their widest since November 23, as noted by ZH. If the S&P 500 continues this path, we may have a long way to go before finding a bottom.
Bitcoin lost its $80k level again, commodities were crushed, and only gold managed to hold onto any gains by the close.
Futures and global markets indicated another session of losses, with the S&P 500 plunging as much as 5.5% before the selling abated and market direction suddenly reversed.
Comments from Trump, which turned out to be fake news, suggested a 90-day pause in tariffs for all countries except China, sparking bullish sentiment. However, the lack of confirmation sent prices plunging again, adding to the market chaos.
Approximately 50 nations reached out to start negotiations, with some planning retaliatory tariffs. The situation remains highly uncertain, and it appears that negotiations will be more prolonged than Wall Street traders would prefer.
This is a time of extreme uncertainty, making it difficult to determine a clear market direction. Our TTIs remain deeply in bear market territory, and it’s best to observe this turmoil from the sidelines.
In the end, it was another wild day in the markets driven by headlines, leaving traders confused about the market’s direction. The Dow led the decline, followed by the S&P 500, while the Nasdaq managed a small gain.
Dip buying in the S&P 500 was prevalent as the index hit bear market territory, and the most shorted stocks soared 14.5% from low to high within 30 minutes, marking a dramatic squeeze.
