Weekly Update for April 7-11, 2025

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Summary of Weekly Update Podcast for the week of March 31st through April 4th, 2025, with a look ahead to April 7th-11th:
Market Overview (March 31st - April 4th):
Significant Decline: The market experienced a sharp downturn, with the S&P 500 dropping 9.08% for the week, including a 10% loss over Thursday and Friday alone. The Dow fell 7.9%, the NASDAQ 10%, and small caps 9.7%, with the NASDAQ entering bear market territory (down 20% from its high).
Trigger Event: The sell-off was sparked by President Trump's announcement of "Liberation Day" tariffs on imports (ranging from 10% to 54%), followed by China's retaliatory 34% tariffs, escalating trade tensions and recession fears.
Capitulation Signs: Friday saw heavy selling and high volume, suggesting possible capitulation ("get me out at any cost"), though it’s unclear if this marks a bottom.
Sector Performance: Defensive sectors (e.g., staples, utilities) outperformed growth areas (e.g., tech, discretionary), with tech stocks such as Apple, Nvidia, and Meta dropping double digits. Energy fell 15%, financials 11.4%.
Technical Indicators: Daily and weekly charts show confirmed negative trends (e.g., ADX above 20, S&P below 50-week moving average). Sentiment indicators (e.g., VIX above 40, low investor confidence) reflect heightened fear.
Economic and Political Context:
Political Impact: Unlike typical market dynamics, current political shifts (e.g., Trump’s policies) are directly influencing the economy and markets, aiming to revert to "pure capitalism" with less government intervention (not "too big to fail"). This echoes Reagan-era changes, which led to pain (e.g., stagflation, double-dip recession) before gain.
Economic Signals: Strong employment data was offset by downward revisions to prior months. Inflation fears are present, but deflationary signals (e.g., oil at $62, yields at 3.99%) suggest weakness rather than overheating. Earnings remain positive but are softening, raising recession concerns.
Fed’s Role: Fed Chair Powell acknowledged tariff headwinds but offered no relief, hinting at a return to market-led dynamics rather than Fed dominance.
Looking Ahead (April 7th-11th):
Uncertain Outlook: It’s unclear if Friday’s drop marks the start or end of a larger decline. The market could slow its descent, bounce, or worsen, depending on upcoming data (e.g., CPI, PPI) and global reactions (e.g., Europe, China).

Key Levels: The S&P sits at a support level (Fibonacci S1, trend channel midpoint), with the 200-week moving average as a critical long-term floor. A break below could signal deeper trouble.
Strategy: Follow the charts and data over opinions, adjusting indicators (e.g., boom indicator) to adapt to unprecedented shifts. Defensive areas remain favored until growth rebounds.
Broader Themes:
Historical Parallels: Similarities to late 2021-2022 and Reagan’s early 1980s suggest short-term pain could precede long-term gains, though timing is uncertain.
Market Sentiment: Emotional selling (e.g., margin calls, media panic) helped drive Friday’s plunge, potentially setting the stage for a reversal if fear subsides.
Global Impact: Trade disruptions and tariff wars loom large, with potential stagflation risks if growth stalls.

PDF of Charts and Slides used in today's video:
https://drive.google.com/file/d/17SZbQrK91Zx1a59I9RUFCnbPdjkth8tU/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!