What were traders thinking? That Trump's tariffs were possibly going to be a good thing for markets? Why did markets close higher over the three days leading into today? Trump is all fault, but the introduction of tariffs was no surprise; he did it in his first term, he ran on it for his second term, and he didn't shy away from his "Liberation Day", and yet markets shed $2tn in value on its release! And, as I said during the credit crisis, where were all the Ivy League business school boffins and corporate leaders to stop any of this from happening? Corporate America was silent (scared? lazy? too rich to care?) and could have done so much more to have stopped this. When Trump is relying on ChatGPT to draw up his tariffs - and imposing tariffs on uninhabited islands - it's clear America's problems run deep, and most of those problem areas lean Republican. And yet, not one word of complaint or action from those who have influence (hello Elon Musk). As for Democr...

There was some modest buying today from the open, but volume was light and markets are below trading range support established during the latter part of 2024. It's hard to see where the buyers are going to come from given the chaos of Trump. I should add, I listened to Josh Brown's The Compound podcast and he showed an interesting chart of market returns in April-May in the year following a strong return in markets; in essence, selling to pay capital gains tax. Given the precarious nature of markets, and the possibility for this seasonal factor to play out, it's likely we have a couple more months of downward action before value buyers return. If we look at individual markets, the Russell 2000 ($IWM) is looking like the first to signal a long term shift in favor of bears with an upcoming "Death Cross" between the 50-day MA and 200-day MA - perhaps completing before the end of the week. Technicals are net bearish and the volume trend has collapsed since the st...

Friday's big gaps lower have the potential to become breakdown gaps, but for now, the near term oversell has for a possible move into the gap price vacuum. The index most likely to achieve this in the coming days is the Russell 2000 ($IWM). The Russell 2000 ($IWM) finished with a neutral doji, just above its 50-day MA and in a thick band of support between $207.50 and $210 marked by the summer swing highs. Technicals have followed price action with new 'sell' triggers in On-Balance-Volume and ADX, but intermediate term stochastics haven't reached the mid-line that is typical support in bull markets. Aggressive bulls can look for a move to test the underside of the 20-day MA. The S&P was unable to hold its 50-day MA on Friday's open, and instead found itself toying with the May swing high. More significant support is likely to be found around 5,265, so if there is an undercut of Friday's low then this will be the next port of call. More concer...