Deep Dive Update for Monday March 31, 2025

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The Deep Dive Update prepared for Monday, March 31:

Key Points:
1. VIX Long-Term Range: The VIX has recently risen above 20, indicating increased market pressure, though it has pulled back slightly. Sustained levels above 20 could signal a bearish market trend.

2. VIX Speed (RSI): Using a 9-period RSI, the VIX is currently neutral. High RSI readings suggest rapid VIX increases (often tied to stock declines), while low readings indicate complacency or rapid market rises, potentially marking tops or bottoms.

3. VIX to S&P 500 Correlation: This correlation is rising but remains below the critical zero line. A move above zero would indicate heightened market nervousness and potential trouble.

4. Volatility of the VIX: This ratio has spiked recently (notably after Friday’s down day when the VIX exceeded 20), suggesting downward market momentum. However, it’s not yet at extreme levels.

5. SKEW Index: Using out-of-the-money options, this index isn’t showing extreme readings, so it’s unclear if it’s signaling a major market move or direction (calls vs. puts).

6. Ulcer Index: A fear gauge for mutual funds, it’s currently below its moving average, indicating no significant distress signals yet.

7. Stock vs. Bond Volatility (VIX vs. MOVE Index): Stocks are more volatile than bonds currently, though this chart is informational and lacks definitive rules of interpretation.

8. Large Cap Growth ETF: Below its 200-day moving average, this hasn’t been shown in recent daily videos unless it nears or crosses key levels.

9. Small Cap to Large Cap Ratio: Large caps are outperforming small caps, which are weaker, but this isn’t providing new insights currently.

10. Market Gains: Despite recent declines, the market is up 59.6% since October 2022 and 36% since October 2023 as of Friday’s close.

11. Technical Alerts: Weekly alerts show a shift from positive (blue/green) earlier in the week to negative (red) by Friday.

12. Index Rankings: Based on technical scores (0-100), the Dow leads at 42.4, followed by the S&P 500 (29.7), QQQ (18), mid-caps (16.8), NASDAQ (14.3), and small caps (9). All scores are low, indicating broad weakness.

13. Moving Averages: Short-term (10-50 periods) and intermediate-term (50-100 periods) rainbows show a negative trend, with the market below these levels since the mid-February ATH.

14. Correction Watch: The market is down nearly 10% from its all-time high (using intraday highs/lows), nearing correction territory, which could shift market sentiment if breached.

15. Standard Deviation: Measures speed, not direction; it’s below its moving average but could rise with further declines.

16. Landry Lite & Volatility: These newer indicators show a persistent downtrend (red background), despite a recent bounce, with volatility flatlining at high levels.

17. Percent B & Bollinger Bands: The market is below the midpoint, negative but not extreme.

18. Long-Term Rainbow & Special K: The market is below a 50-250 period rainbow, and the Special K oscillator crossed below its red line weeks ago, signaling long-term negativity.

19. Global Correlations: The S&P and German DAX are diverging (DAX up, S&P down), while U.S. bonds and stocks show weakening correlations.

20. Ichimoku Cloud: The market is below support, with short-term (green) and intermediate-term (blue/red) lines confirming negativity.

21. Sector Insights: Financials are holding up, but regional banks are underperforming, raising questions about potential weaknesses. Transports lag the Dow significantly.

22. Inflation & Rates: Short-term bond ratios suggest easing inflation fears, but TIPS vs. longer bonds show mixed signals, with Friday’s PCE data causing a sell-off.

23. U.S. vs. Europe: European stocks (e.g., Eurozone ETF) are outperforming U.S. stocks, and U.S. yields are correlating normally with the dollar index.

24. Stocks Above Moving Averages: S&P, mid-caps, and small caps are below 50% for both 50- and 200-day averages, reinforcing a negative outlook.

Overall, the picture is cautious: the market is under pressure with rising volatility, weak technical scores, and negative trends across short- and intermediate-term indicators. While not at extreme levels, key thresholds (e.g., VIX above 20, 10% correction) should be watched that could signal further declines if breached.

PDF of Charts and Slides used in today's video:
https://drive.google.com/file/d/11pfSs_NNvazwzCn6NVjhoA22pq9AJAsm/view?usp=sharing

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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!