by Mahesh Kalbhor | Apr 12, 2025 | Weekly Update
Why Trump Ignored a 20% Stock 📉 Drop but Surrendered to a 40 bps Bond Spike 📈
📉 Stocks crashed 💥 Trump stood firm.
📈 Bonds spiked—Trump backed down.
Why?
As President, Trump imposed tariffs to revive U.S. industry.
🇺🇸 America had deindustrialized—we build 5 chips a year. China? 1,800.
🛠️ Industrial capacity = national security.
But tariffs rattled markets.
To defend the move, Trump’s team said:
💬 “Only 10% own 88% of stocks. Trump cares about the other 90%.”
That held…until the bond market revolted.
🔺 Yields surged instead of falling.
💸 Deficits (trade + fiscal) shook investor confidence.
📉 Bonds are the foundation:
• Banks fund daily ops with them
• Corporates run payroll with them
The system was at risk of collapse.
– Jamie Dimon called Trump
– Trump delayed tariffs for 90 days
Lesson?
You can fight Wall Street.
But not the Bond Market.
#MacroView #Tariffs #Trump #BondMarket #Stocks #IndustrialPolicy #USChina #Geopolitics #Economy #Deficits #FinancialSystem #WallStreet vs #MainStreet
by Mahesh Kalbhor | Apr 12, 2025 | Weekly Update
Wild Moves in the Markets: Bear Grip Remains Despite Oversold Rally
📉📈🔥 #MarketVolatility #SPX #VIX
Since last Friday, markets have been on an emotional rollercoaster. Volatility is back—with a vengeance.
$SPX sank to the 4900 level and found support there for 3 straight days (April 7–9). This matches support from the April 2024 pullback—but the sell-off this time was much sharper.
Then came the spark:
A late-day tariff tweet from President Trump sent the market soaring on April 9—one of the biggest up days in history.
💬 “Massive tariff changes coming. America first.”
Instantly, traders bought the dip… and then some.
But here’s the thing: history warns us not to trust these monster up days in isolation. The 2008 financial crisis gave us several such rallies—yet the market still fell further.
And now, there’s buzz:
🧐 Talk of a possible SEC inquiry into suspicious options activity just before the tariff announcement is gaining steam. If true, it raises questions about insider trading ahead of a high-volatility news cycle.
#SECWatch #MarketIntegrity
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Technical Breakdown
• The 20-day MA is falling—currently around 5540. Expect resistance there.
• The 200-day MA near 5750 is also sloping down.
• A breakout above 5800 would be technically bullish and force a reassessment.
Until then, this remains a classic oversold rally within a bearish trend.
🔄 #TechnicalLevels #MarketWatch
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Sentiment Snapshot
• Equity-only put-call ratios just hit new relative highs = active sell signals.
• Weighted ratio rolled over for a day, but no confirmed buy yet.
• Breadth? Still terrible. One 90% up day isn’t enough to turn it around.
#BreadthIndicators #ContrarianSignal
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Volatility Update
• $VIX soared above 60 on April 7 and stayed elevated = confirmed spike peak buy signal (valid for 22 trading days).
• But the longer-term $VIX trend remains bearish, and won’t flip unless $VIX drops below 19.50 for two consecutive closes.
⚠️ #Volatility #VIX
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Bottom Line:
The bear case remains intact—but it’s being tested.
• ✅ Only one confirmed buy signal ($VIX spike).
• 🔁 Roll deep ITM options for credits.
• ⛔ Don’t chase the rip—wait for breadth + sentiment confirmation.
• 🧠 Keep an eye on regulatory chatter—the story may not be over yet.
⸻
#SP500 #MacroView #MarketUpdate #OptionsStrategy #VolatilitySpike #TrumpTariffs #SECInquiry #RiskRadar #InvestmentStrategy #FinancialMarkets #TechnicalAnalysis
by Mahesh Kalbhor | Apr 6, 2025 | Weekly Update
This past week marked the sharpest market drop since 2020 — with 📉 Thursday’s plunge quickly eclipsed by an even deeper Friday selloff. The result? A monstrous weekly loss that’s left indexes in freefall. We are in full-blown bearish mode, and while a retracement may be due, momentum looks uncertain. Implied volatility is spiking ⚠️, and option prices are hitting highs not seen in years.
📉 TECHNICALS UNDER PRESSURE
What started as a mediocre, oversold rally got rejected at the declining 20-day moving average — with the 200-day MA lurking nearby like a wall of resistance. $SPX flirted with support near 5500, but that bounce quickly reversed.
🚨 THE TRIGGER: TRUMP TARIFFS
In just 36 hours following President Trump’s tariff announcement, $SPX futures dropped by 530 points. The message was loud and clear: Even expected policy moves can cause unexpected damage when confidence is fragile.
🔻 LOWER HIGHS & LOWER LOWS EMERGE
$SPX now shows a clear pattern of lower highs and lower lows (see chart 📊 Figure 1) — a textbook downtrend. Too early to call a full bear market, but the structure is bearish enough to justify holding core short positions. A reversal would require reclaiming 5700–5800 — a tough ask after last week’s price action.
⚠️ OVERSOLD ≠ BUY SIGNAL
Equity-only put-call ratios are surging, eliminating any near-term buy signals. Breadth is collapsing — April 4 may clock in as a 90% down day. Oversold oscillators alone won’t cut it. We need sustained breadth improvement before we act.
🔥 VOLATILITY IS BACK
Both realized and implied volatility are soaring. $VIX is finally reacting (see chart 📊 Figure 4), and $VIX futures are heavily discounted — setting up a classic $VIX/SPY call hedge. A “spike peak” buy signal in $VIX could form soon… but we’re not there yet.
Meanwhile, the calendar isn’t slowing down. Key economic data rolls in this week 📊, including consumer health reports, inflation metrics, and the FOMC minutes. Several Fed speakers are also lined up, and just to raise the stakes — earnings season is right around the corner 💼. Expect more volatility.
Now is the time to protect your portfolio:
✅ Consider collars
✅ Don’t dismiss cash — it’s a position many would prefer right now
Stay disciplined, stay defensive, and stay safe.
⸻
🗓️ Key Economic Events:
• Apr 7: Consumer Credit
• Apr 9: Wholesale Inventories, 📝 FOMC Minutes
• Apr 10: 🧾 Jobless Claims, 📈 Consumer Price Index, 🏛️ Federal Budget
• Apr 11: 🏭 Producer Price Index, 🧠 Consumer Sentiment
🎯 STRATEGY MOVING FORWARD
• Maintain bearish core positions
• Avoid premature bottom fishing
• Watch for confirmed signals before re-risking
Expensive puts = limited roll credits… but risk management still takes priority.
⸻
BOTTOM LINE:
This isn’t a dip — it’s a drop. And until the market gives us a reason to believe otherwise, the best position is a defensive one.
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#Markets #S&P500 #Volatility #HedgeFundInsights #OptionsTrading #SPX #VIX #BearMarket #MarketAnalysis #TechnicalAnalysis #TrumpTariffs #InvestorUpdate #FinanceNewsletter #PutCallRatio #Breadth #RiskManagement
by Mahesh Kalbhor | Mar 31, 2025 | Weekly Update
📉 Market Update: Analyzing the Recent $SPX Rally & Weekly Market Recap 📊
The recent rally in the S&P 500 ($SPX) appears to be a typical oversold bounce rather than indicative of strong bullish momentum. Here’s why:
🔹 Technical Resistance:
$SPX rallied to its declining 20-day moving average, briefly surpassing it but quickly retreating—a classic sign of an oversold rally.
This resistance is further strengthened by the coinciding 200-day moving average, forming a substantial barrier just under 5800.
🔹 Support Levels to Watch:
📌 The gap at 5650 was filled today but didn’t hold support.
📌 Key support zone at 5500-5540, marking earlier monthly lows.
📌 Strong support lies at 5400, matching lows from September last year.
📌 Weekly Market Recap:
Major indexes plunged significantly on Friday, notably with Nasdaq falling over 400 points.
The drop confirmed a bearish close for the week, dragging all three major indexes below their critical 200-day moving averages again.
Investors should remain cautious or neutral until these indexes reclaim and sustain positions above these crucial moving averages.
🔹 Market Sentiment & Indicators:
⚖️ Equity-only Put-Call Ratios: Mixed signals; weighted ratio indicated a tentative buy, yet standard ratio withheld confirmation.
🌐 Market Breadth: Weakened slightly this week, yet not enough to negate existing buy signals, with NYSE breadth notably outperforming stocks-only breadth.
📈 Volatility ($VIX): Mixed indicators remain; the “spike peak” buy signal from March 12 continues with adjusted stops, but overall volatility suggests caution.
🚨 Option Prices & Volatility: Friday’s sell-off caused implied volatility and option prices to rise notably, although they remain below recent highs.
📅 Economic Reports & Events (Week of April 1):
🏗️ Apr 1: Construction Spending
🔍 Apr 1: JOLTS
🛠️ Apr 2: Factory Orders
📊 Apr 3: Jobless Claims
🌐 Apr 3: Trade Deficit
📈 Apr 4: March Unemployment Report
💬 Additionally, several Federal Reserve members, including Chairman Powell, will speak this week, potentially driving further volatility.
⚠️ Conclusion & Outlook:
Given the intensity of oversold conditions previously, the recent rally was surprisingly weak, reaffirming a bearish or neutral outlook. Watch carefully for $SPX movements around the critical support of 5500. A cautious approach remains prudent; remember that holding cash is also a strategic position.
🔔 Stay cautious, keep your trading plans prepared, and manage risks proactively. 📌
#MarketAnalysis #SPX #StockMarket #TechnicalAnalysis #TradingStrategies #MarketVolatility #InvestingInsights #EconomicReports #FinancialPlanning #RiskManagement
by Mahesh Kalbhor | Mar 23, 2025 | Weekly Update
Why Do Market Crashes Keep Bottoming in March?
If you’ve been watching the stock market over the past few decades, you may have noticed something oddly specific: when things go bad, they tend to hit rock bottom in March.
Let’s take a look:
Major Market Crashes & Their Bottoms:
• 📉 2000 crash (Dot-com Bubble): Bottomed in March
• 🏦 2008 crash (Global Financial Crisis): Bottomed in March
• ⚙️ 2018 crash (Tech selloff): Bottomed in March
• 🦠 2020 crash (COVID-19 pandemic): Bottomed in March
• ❌ 2022 crash: Did NOT bottom in March. It bottomed in Oct.
Takeaway: 80% of recent crashes bottomed in March.
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🤔 So… What’s With March?
There isn’t a single reason, but here are a few strong theories:
1. 💸 End of Tax-Loss Selling
Investors often sell losing positions in December for tax benefits. That downward pressure lingers into Q1, and by March, much of the selling is flushed out.
2. 🧾 Fresh Capital Inflows
New fiscal years, bonuses, and retirement account contributions often kick in around March, giving the market a boost.
3. 🏛️ Fed Policy Announcements
The Federal Reserve tends to make major policy updates in Q1, often calming fears or injecting stimulus after a rough winter.
4. 🌱 Seasonality & Sentiment
After a gloomy Q4 and volatile Q1, investor optimism tends to return in the spring — what some call the “spring rally.”
📈 Market Update: Navigating a Choppy Rally
Over the past week, the stock market—as represented by the $SPX—has made some effort to rally. We’ve seen a couple of strong days, yet resistance at or just above 5700 has repeatedly pushed back these gains. Typically, oversold rallies are expected to reach, or even slightly surpass, their declining 20-day moving averages. In our current scenario, that moving average sits at 5760 and is falling rapidly. Rather than the market surging to meet this level, it now appears that the moving average will drop to align with $SPX.
🔍 Key Levels to Watch:
Resistance:
🚧 The 5700 mark remains a formidable barrier.
Support:
🛡️ There is tentative support in the 5500-5540 zone—the area where daily lows were recorded a week ago. If this fails, we might see support near 5400, a level that provided relief last September.
📊 Rally Dynamics and Technical Signals:
Put-Call Ratios:
📉 Equity-only put-call ratios continue to send sell signals. Even on rally days, these ratios are rising—the weighted ratio, in particular, has reached levels last observed during the 10% market correction in October 2023. The standard ratio is also on an upward trend, though not as extreme yet. These metrics won’t flip to buy signals until they peak and begin to decline.
Market Breadth:
⚖️ Breadth has been volatile, with large net plus or minus figures appearing almost daily. While breadth oscillators have moved into buy territory (reflecting recovery from oversold conditions), this optimism hasn’t translated into consistent upward momentum.
Implied Volatility ($VIX):
🔄 The $VIX spiked sharply in early March and has since pulled back, creating a “spike peak” buy signal on March 12th that will remain valid for 22 trading days unless $VIX closes above its recent peak of 29.57. Concurrently, a $VIX sell signal established in late February persists, given that both $VIX and its 20-day moving average are above the 200-day moving average (just above 17).
🤔 Final Thoughts:
In summary, the market appears oversold and is making a violent effort to rally, yet the momentum is not gaining significant traction. In a typical bear market environment, these oversold conditions are eventually worked off, with sell signals resuming their influence.
For now, Staying informed and agile is key in navigating these choppy waters.
#MarketTrends #SPX #InvestingInsights #TechnicalAnalysis #TradingStrategies
by Mahesh Kalbhor | Feb 20, 2025 | Weekly Update
💼 Market Update: Fed Policy & QE 💰
Jerome Powell recently stated that the Fed won’t start QE until rates drop to 0% 🚫💵. Here’s the lowdown:
📈 Interest Rates 101:
• The Fed sets the short-term (overnight) lending rate, which influences all long-term rates (1yr, 2yr, 10yr) 🔄.
• When inflation rises, rates are increased to slow borrowing and cool the money supply 🔥⬆️. Conversely, lower rates boost borrowing and stimulate the economy 💡⬇️.
• Post-COVID, rates have climbed from 0% to 4.5%, slowing growth and affecting asset prices 📉🏠.
🖨️ Quantitative Easing (QE):
• QE is essentially “money printing” — a tool to inject cash into the economy when rate cuts aren’t enough 💵🖨️.
• Historically, QE has been a fallback during crises (think 2019 liquidity crunch & post-2021 inflation control) 🕰️➡️💸.
• Despite current denials, past trends indicate that when conditions worsen, similar measures might return, even under a different name 🔄.
🔮 Looking Ahead:
While Powell’s stance is clear for now, history suggests the Fed’s money-printing tool remains a constant backup in turbulent times. Stay tuned for how these policies evolve! 🚀
#FederalReserve #JeromePowell #QE #InterestRates #MonetaryPolicy #Economy #FinanceInsights
