00:00 Josh
The S&P 500 and Nasdaq jumped in a volatile session ahead of Trump’s tariff rollout. Yahoo Finance’s Jared Blikre, George is now with the trading day takeaways, Jared.
00:09 Jared
Thank you, Josh. We are starting with a bear trap and that’s actually a good thing for bulls. You don’t want to be caught in a bear trap there, uh, if you are a bear. But let’s look at the price action over the last two days. This is something that has kind of evolved over these two days in the major industries. You can look at the Nasdaq, not quite the, uh, not quite the Dow, but the Russell 2000 as well. So here’s what we’re looking at. Year to date chart of the S&P 500 price action. Yesterday, we just barely dipped below. In fact, we opened below to the lows of the year, new lows of the year, and then we closed in the green. And then we are able to close even higher today. Now, typically in a bear trap, uh, you see the bears get caught and they have to reverse, they have to get out, and that provides fuel for the blow for the bulls. So that’s kind of a short covering rally. Now, I’d like to see a little bit more green here and some of these candles, you want to see a little bit more continuation to the upside, but that is what it’s, uh, that’s what we’re seeing here.
00:59 Josh
And for a bear trap, for traders playing along at home here, how how reliably bullish is that, Jared?
01:05 Jared
For this particular scenario where we dipped to a new six-month low and then we rally and we close above 0.25%, it’s actually not that great. And I was a little bit surprised. Jason Geffert, uh, ran the stats, found this on X, and it’s not really bullish until you start looking six to 12 months out. But guess what, almost everything in stocks is bullish six to 12 months out because stocks tend to go up. So unfortunately, uh, history isn’t that as as favorable as I thought it would be here.
01:31 Josh
All right. Let me point number two.
01:33 Jared
Facts or feelings. Uh, we got a bunch of hard and soft data out today. I’ll start with the soft and that’s a survey ISM manufacturing survey. It was not that great. The median became, uh, median estimate was 49 and a half, came in below that at 49. New orders fell, production fell, employment fell. What rose? Prices paid. So that just kind of speaks to inflation. And then we also got the Jolts report. Jolts wasn’t great either, but that is a hard data, and it’s also covering February, which is a little bit more in the rear view mirror. Uh, the ISM survey I was talking about, that is March. But I did have a chance to sit down with Jessica Inskip of, uh, she’s director of research at stockbrokers.com. We have a black a brand new, uh, stocks in translation episode out today with her. Encourage everybody to, uh, look at it. And guess what? She was talking about hard versus soft data. Here’s what she had to say.
02:26 Jessica Inskip
We’re feeling uncertain about the market, therefore consumer sentiment is down. You see this process of savings. The real answer is does that translate into hard data? Do consumers stop spending? Do retail sales go down? Are earnings going down? That’s the difference between soft data and hard data. And because of the uncertainty right now we have within the market, that creates volatility. There’s lots of moves because we don’t know what’s going to happen. And that scares, that scares investors.
03:01 Jared
So soft data, weak soft data doesn’t always translate into soft hard data, but we’re seeing a little bit of that, and that’s a trend that we have to continue to monitor.
03:10 Josh
All right. So we we’ve been looking backwards, which is important. What let’s look forwards. What’s what’s ahead of us?
03:15 Jared
I tell you what, April is no joke. And, uh, let’s take a look at some seasonality because March was mixed, and we expected some turbulence in March. We got a bit more than the one than what was expected. But here I have two models. I’ve been tracking these for several months now. The white one is my 1928 model. Goes all the way back then. You got to match up the days of the week. And the green one is a median, uh, median since 1990. They both target about 3% returns for the month, and they both take a pretty similar path. And you can see the white line here kind of stalls out after an initial punch up, stalls out in the middle, and then it accelerates into the end there. And the green is just kind of a a little bit more steady there. And you know, I also like to take a look at the VIX, which is kind of opposite equities. This is the entire year, and we’ve seen the VIX really trace out in green here. This is what actually happened. What was expected to happen in white. And you’ll notice that white line is supposed to keep coming down. That means the fear in the market is supposed to be coming down, so that’s bullish for equities. I will say April is supposed to be the most positive months of the year. If we can’t manage green in April, we have a serious problem and it doesn’t speak well for the rest of the year.
04:17 Josh
Well, what else is on the calendar for April?
04:20 Jared
I got a couple birthdays in my family. That’s about it.
04:23 Josh
All right, it’s a big month for the Blikres.
04:24 Jared
Yes, it is. Thank you, my friend. Great to see you.