4/6/26 Recap

The SPY made an attempt to cross the 21 ema for the 3rd straight session and rejected by falling back below it thus far. Again we have yet to close over that moving average since this war began in late February. Trump does speak in an hour so and he will give us alot more direction and maybe propel us to our first close over it in weeks. He moved the deadline from today to tomorrow night at 8 pm EST for Iran before he ramps the war. Rumors came out overnight of a 45 day ceasefire, but at this point who knows what is really going on because we keep changing deadlines and they keep saying we’re not talking. All I know is when a chart is below the 21 ema it is in a downtrend and we also remain below the 200 day, until those are taken out, you are just guessing when stocks will resume their uptrend. The VIX is just over 24 which is nice to see after spending weeks in the 27-30 range meaning volatility is slowly coming down. Oil is also green again and over $112 as that remains the longer term headwind for inflation and equities.

We still have not really had that high volume capitulation washout you usually want to see before a bottom is in. I know it is a long shot, but there is still so much that can wrong here. Iran has threatened that strikes on their infrastructure this week would lead to them striking infrastructure in other gulf states which would trigger some serious issues if we’re really hitting water and electricity. The speed with which this could spiral out of control is very high. It makes sense we aren’t reclaiming the 21 ema until we have some clarity. It’s obviously hard to be bearish when stocks have gone straight up for the last 100+ years overall but this is a situation where things can go very bad, oil can spike materially and we could face something on the order of a global depression. The odds are obviously low for that but the possibility still does exist. Everyone is right to be complacent because nothing ever does happen, but we’re dealing with the biggest worldwide sponsor of terror here, if ever something was to go wrong, it would be something like this vs the 2025 tariff tantrum where Trump was pretty much negotiating with himself and all he had to do was stop the tariff rhetoric and save markets.

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