An intraday drop into bear market territory ultimately gave way to the S&P 500\u2019s best week since late\u00a02023<\/strong>.<\/p>\n The S&P 500 fell 12% in four days that saw a record $5.8 trillion in market value wiped out<\/strong>. That drove the CBOE Volatility Index (VIX) to the highest level since 2020\u2019s pandemic bear market, while S&P price swings echoed 2008\u2019s financial crisis<\/strong> (chart\u00a0below).<\/p>\n But stocks staged a historic rally as trade war and tariff headlines drove volatility. After President Trump announced a 90-day pause on reciprocal tariffs, the S&P 500 rose by 9.5% in a single\u00a0session<\/strong>.<\/p>\n It was the third-largest daily gain since 1950 for the S&P 500 while the Nasdaq Composite posted its second best day ever<\/strong>. The S&P ultimately finished the week with a 5.7% gain, which is the best week for the index since November\u00a02023.<\/p>\n But the moves were fast and furious in other corners of the capital markets as well. The U.S. Dollar Index is testing a key a support zone that has held since early 2023<\/strong>. And the 10-year Treasury yield posted its largest weekly increase in over 20\u00a0years<\/strong>.<\/p>\n It\u2019s the volatility in other areas of the markets like currencies and Treasury bonds that might have forced a quick pivot on trade and tariff\u00a0policy<\/strong>.<\/p>\n The uncertainty around tariffs has become a binary and unpredictable event for the stock market<\/strong>. Signs of tensions fuel further downside, while an easing of tensions sends stocks sharply in the other direction.<\/p>\n This week, let\u2019s look at signs of capitulation around last week\u2019s pullback<\/strong>, and if the stock market\u2019s historic rally on Wednesday could ultimately mark an important near-term low in the stock market<\/strong>. We\u2019ll also examine volatility that\u2019s unfolding in other market sectors that could deliver more spillover impacts to investor portfolios.<\/p>\n The sharp selloff across the market didn\u2019t spare any sectors. At one point, every S&P 500 sector was trading below its 200-day moving average<\/strong>. The selling also led to capitulation-type signals across a variety of positioning, breadth, and momentum metrics<\/strong>. The chart below creates an indicator by looking at breath and momentum, including the portion of sub-industry groups at varying levels of drawdowns. The z-score of the indicator looks at how far it\u2019s straying from the average<\/strong>, and is recently dropping below a value of 4. That\u2019s an extreme move from the average, which historically has positive implications for forward\u00a0returns<\/strong>.<\/p>\n Trump\u2019s pivot on tariffs sparked a historic one-day rally across Wall Street. By some measures, the participation in Wednesday\u2019s rally was historic as well<\/strong>. The ratio of advancing stocks relative to declining issues on the NYSE topped 37\/1. That\u2019s the highest level in at least over a decade<\/strong>. The volume in advancing stocks relative to declining issues hit a ratio of 72\/1<\/strong> (chart below). That\u2019s the highest ratio ever back to at least 1980. The next six highest volume A\/D readings saw the S&P 500 higher 3-, 6-, and 12-months out with stronger than average\u00a0returns<\/strong>.<\/p>\n Volatility wasn\u2019t just experienced in the stock market in recent weeks. Longer-dated bond yields are on the move as well. It might have been a jump in 10-year Treasury yields that spooked the White House and forced a pause on new tariffs<\/strong>. You can see in the chart below that that the 10-year yield jumped 49 basis points last week to 4.49%<\/strong>. That\u2019s the largest weekly jump in yields in over 20 years.<\/strong> The market for Treasury securities stands at $29 trillion market, and volatility can have knock-on effects to other\u00a0sectors.<\/p>\n Chart from Jim Bianco<\/a> on\u00a0X<\/p>\n Following a post-election rally that took the U.S. Dollar Index (DXY) to the highest level since late 2022, recent losses are accelerating and testing a key support zone<\/strong>. After peaking in mid-January, DXY has dropped 9%. The pullback has accelerated since the start of April as tariff developments intensified and the economic growth outlook is called into question.<\/strong> DXY is now taking out a key support level near 100, which has major implications for commodities priced in U.S. dollars as well as international equities<\/strong> where a weaker dollar boosts the returns earned on international stocks by U.S. investors.<\/p>\n As tariff uncertainty ramped up, the S&P 500 posted a 2-day decline of 10%+ for just the eighth time in the past century<\/strong>. That\u2019s the equivalent of entering correction territory in just two days. The chart below plots the subsequent move in the S&P 500 during the next 12 months following a 2-day 10% decline. You can see that price action is generally choppy, especially over the next couple months<\/strong>. That includes several back tests of the initial low made on the pullback<\/strong>.<\/p>\n Chart from Ned Davis\u00a0Research<\/p>\n On an intraday basis, the S&P 500 fell by over 20% from its peak on February 19. The longer-term recovery from the selloff will come down to the economic outlook and if the earnings picture remains intact<\/strong>. That means avoiding the recession scenario if the the magnitude and duration of the stock market decline will be shorter-lived<\/strong>. The chart below shows the S&P 500\u2019s past bear market drawdowns sorted by depth and duration. The orange dots are when bear markets are driven by recession, which tend to be more drawn out across time and have lower drawdowns<\/strong>.<\/p>\n The Traders Hub features live trade alerts, market update videos, and other educational content for\u00a0members<\/strong>.<\/p>\n Here\u2019s a quick recap of recent alerts, market updates, and educational posts:<\/p>\n Buying another gold mining stock that\u2019s breaking\u00a0out.<\/strong>The historic breadth metrics behind the S&P 500\u2019s rally\u00a0attempt.<\/strong>Market sectors showing the best relative strength for new purchases.<\/strong>What does implied volatility mean, and how it impacts your portfolio.<\/strong>Understanding the two distinct phases behind the S&P 500\u2019s bear\u00a0market.<\/strong><\/p>\n You can follow everything we\u2019re trading and tracking by becoming a member of the Traders\u00a0Hub<\/strong>.<\/p>\n By becoming a member, you will unlock all market updates and trade alerts reserved exclusively for\u00a0members.<\/p>\n \ud83d\udc49You can <\/strong>click here to join\u00a0now<\/strong><\/a>\ud83d\udc48<\/strong><\/p>\n ADMA Biologics (ADMA)<\/p>\n Peaked near $24 in November then started a steady pullback. The stock rallied into late March which brought the MACD back above the zero line. A smaller pullback is creating a MACD \u201chook\u201d. I\u2019m watching for a move over\u00a0$21.<\/p>\n Economic Reports<\/em><\/p>\n Earnings Releases<\/em><\/p>\n I hope you\u2019ve enjoyed The Market Mosaic, and please share this report with your family, friends, coworkers\u2026or anyone that would benefit from an objective look at the stock\u00a0market.<\/p>\n Become a member of the Traders Hub<\/strong> to unlock access\u00a0to:<\/p>\n \u2705Model Portfolio<\/strong><\/p>\n \u2705Members Only\u00a0Chat<\/strong><\/p>\n \u2705Trade Ideas & Live\u00a0Alerts<\/strong><\/p>\n \u2705Mosaic Vision Market Updates +\u00a0More<\/strong><\/p>\n Our model portfolio is built using a \u201ccore and explore\u201d approach, including a Stock Trading Portfolio and ETF Investment Portfolio.<\/p>\n Come join us over at the Hub as we seek to capitalize on stocks and ETFs that are breaking\u00a0out!<\/strong><\/p>\n Come join the\u00a0Hub!<\/a><\/p>\n Disclaimer: these are not recommendations and just my thoughts and opinions\u2026do your own due diligence! I may hold a position in the securities mentioned in this\u00a0report.<\/em><\/p>\n Capitulation to comeback: A historic market rally.<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" Now for this week\u2019s\u00a0issue\u2026 An intraday drop into bear market territory ultimately gave way to the S&P 500\u2019s best week since late\u00a02023. The S&P 500 fell 12% in four days that saw a record $5.8 trillion in market value wiped out. That drove the CBOE Volatility Index (VIX) to the highest level since 2020\u2019s pandemic […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-59302","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/59302"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=59302"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/59302\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=59302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=59302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=59302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The Chart\u00a0Report<\/h3>\n
Heard in the\u00a0Hub<\/h3>\n
Trade Idea<\/h3>\n
Key Upcoming\u00a0Data<\/h3>\n