Deep Dive Update for Monday April 21, 2025

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The Deep Dive Update prepared for April 21, 2025. This update provides a detailed analysis of various financial charts not regularly featured in daily updates, offering deeper insights into market trends. Key points include:
1. VIX (Volatility Index):
The long-term VIX range shows elevated fear but remains below 20, indicating no extreme negativity yet.
The VIX's speed, measured by a 9-period RSI, is neutral, having cooled from high fear levels but the VIX remains above 20, suggesting caution.
The VIX-S&P 500 correlation and volatility of VIX (VVIX) show no significant new insights, with VVIX rising, indicating faster VIX movements and a negative market outlook.
2. SKEW Index and Landry Volatility:
The SKEW Index, which tracks tail risk, has dropped from high levels, offering no current insight.
Landry Volatility, based on the S&P 500, has increased as the market declines, reflecting heightened volatility.
3. Stock vs. Bond Volatility:
The MOVE Index (bond volatility) vs. VIX shows stocks are more volatile than bonds, with bonds outperforming stocks in 2025, signaling market weakness.
4. Large Cap Growth and Death Crosses:
Large cap growth stocks, crucial for market strength, are weakening, with a "death cross" (50-period MA crossing below 200-period MA) across major indexes (S&P, Dow, NASDAQ, etc.), confirming a downtrend.
The market is in a correction (down 14.02% from February 2025 highs), not yet a bear market (over 20% decline).
5. Large Caps vs. Small Caps:
Large caps outperforming small caps, though both are under pressure. Small caps showed slight relative strength on April 17.
6. Risk On/Off Ratios:
High beta stocks (e.g., Apple, Nvidia) are underperforming, reflecting a risk-off market. Low beta stocks also show declining ratios, confirming negative trends.
7. Market Gains and Advance/Decline Lines:
Despite recent declines, the S&P 500 is up 51.17% since October 2022 and 28.73% since October 2023.
Advance/decline lines (price and volume) are sideways or weakening, with volume-based metrics showing more pressure due to selling in high-volume stocks such as Nvidia.
8. Technical Indicators:
Technical alerts show a long list of negative signals (red), though less severe than the prior week.
Indexes ranked by technical strength (0-100 scale): Dow (28.4), S&P (27.1), NASDAQ 100 (20.7), mid-caps (15.4), NASDAQ composite (14), small caps (9.1).
Short-term (10-50 MA) and intermediate-term (50-100 MA) trends are negative, with prices below declining moving averages.
9. Other Charts:
Bollinger Bands and Landry Light confirm ongoing downtrends without extreme readings.
Ichimoku Cloud and Fibonacci retracements show prices far from support levels, with no significant recovery.
The Special K oscillator indicates long-term weakness.
10. Sector and Global Insights:
Defensive stocks (staples) are outperforming tech, and regional banks are underperforming the broader financial sector, signaling caution.
German DAX-S&P correlation is neutral, with global markets declining together recently.
11. Bonds and Yields:
Bond ratios (short-term vs. longer-term, TIPS) suggest the market is not overly concerned about inflation or rising rates.
The 10-year vs. 2-year yield curve is normal, but the 10-year vs. 3-month curve is near inversion, raising recession concerns.
Bonds are outperforming stocks, with a slight increase in long-term bond-S&P correlation.
12. Positive Scenarios:
There is some improvement in stocks above their 50/200-day MAs for S&P, mid-caps, and small caps, but no strong follow-through, indicating potential but not confirmed recovery.

PDF of Charts and Slides used in today's video:
https://drive.google.com/file/d/1XFktdr7y97c7lEqlqdzGcXICTo5nUQrI/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!