March 28, 2025
Good morning,
Equity markets so far this week have still been volatile, just not as volatile as they’ve been over the past month. The Volatility Index (VIX) is off its recent peak (just under 30) and below the alarm-threshold of 20. At 19 this morning, however, there is no sigh of relief to be heard. The major indices are mixed, plus/minus half a percent, week-to-date. Predictably little movement this week ahead of next week’s presumptive imposition of reciprocal tariffs.
Given the White House’s affection for preannouncements, it leaves markets vulnerable today to headline risk over the weekend and into Monday’s month-end. It would seem very reasonable for investors to adopt a fairly defensive approach today – SOP for a post-inauguration Fridays.
By way of an update on our 4-step bottoming process (oversold, rally, test, and breadth thrusts), markets were at step-3 at the last report last week. They remain at step-3. Again, this is no surprise, given the next wave of tariffs slated for next Wednesday. We’ll cover that in the week ahead on the Morning Note on Monday. In the meantime, have a nice weekend.
Be well,
Mike