Summary: Markets sold off hard as they processed the new round of tariffs and potential retaliation, spiking volatility to the highest in five years and hitting extreme oversold levels in equities. Mean reversion is possible, but too early to tell and given the continued headline risks, continued caution is warranted.

Risk On

• Amidst the turmoil, bitcoin heriocally held all week at its current levels and above its 200-Day Moving Average. (+)

Neutral

• The McClellan Oscillator, after briefly turning positive on Tuesday, swung back negative down to around the -150 level, which is often support. (=)
• Gold, after hitting new all-time highs on Monday, finally retreated Friday, but only back into last week’s levels. (=)
• The dollar stumbled hard initially on the tariff news, but actually mostly recovered to close out the week. (=)
• Rates had a slightly subdued reaction to all the chaos this week with the long bonds recovering their 200-Day Moving Average but relatively little change over their trading range for the last six weeks. (=)
• Seasonally, April tends to be a good month for equities, though the current headlines will likely dwarf seasonal trends as a catalyst for the market. (=)

Risk Off

• Markets absorbed one of their worst weeks in quite a while, down between -7.6% in the Dow to -9.76% in the Nasdaq. Indexes hit extreme oversold levels across the board in price and Real Motion, revisiting six and twelve month lows. Given the news-driven nature of this correction, technical oversold levels should be approached with caution. (-)
• All sectors were down this week, with energy, transportation, and technology taking the hardest hits. Homebuilders, utilities, and consumer staples fared the best. (-)
• The color charts (moving average of stocks above key moving averages) were negative across all the indexes and timeframes. (-)
• Risk gauges remain fully risk-off. (-)
• The new high new low ratio is negatively stacked and sloped and reaching extreme levels. (-)
• Cash volatility spiked to its highest levels since 2020, marginally exceeding the spike levels we saw last August in that technology flash-crash. (-)
• Value continued to outperform growth in this most recent sell-off, though both were hit about as hard. (-)
• Five of the six members of the family are in bearish phases (KRE lone holdout, but headed similarly) and all of them well below their 200-Day Moving Averages. Retail (XRT) outperformed, down only about half the broader market. (-)
• Global equities took a hit from the tariff talk with emerging and developed foreign equities unable to sidestep the rout. Emerging market equities are outperforming developed markets over the last couple weeks. (-) 
• Dr. Copper collapsed back down to its 200-Day Moving Average, erasing the last two months of work with a similar but smaller drop in soft commodities (DBA). (-)
• Oil took an outsized hit this week, likely from concerns about global trade amid tariff talk and a shift in the dollar. (-)