To The Moon

The market terminology of ‘bull’ and ‘bear’ is thought to be derived from how these animals attack: the bull with an upward motion of its horns, the bear tearing downwards with its paws. At the moment fear and uncertainty prevail, as the Trump administration implements its well telegraphed tariff agenda, but it has turned into a fiasco of on again off again rhetoric as well as retaliatory actions by Canada, China and the European Union.  Ontario’s threat of tariffs on electricity to Minnesota, Michigan and New York definitely gave Trump a fright and he retreated from the brink again reversing some of the tariffs he was going to impose.

 Since the election the $S&P 500(.SPX)$ had been closing each day within the 5,770 to 6,130 range albeit the market has trended lower from its all-time intra-day high of 6147 on 19th February and has been down 12 of the last 15 days and in total the market has lost more than $4 Trillion in value since that high.  Unfortunately, this week the market was slammed down on Monday falling 2.7% and then fell another 0.8% on Tuesday to a low of 5599 so it is hard not to be bearish.  A bear market relief rally may have started today with S&P 500 up 0.5%.

The index itself is not the only gauge of the market. The other prevalent indicators are the VIX, the put-call ratio, new highs to new lows, and market breadth. The first two relate to the options market, while the latter two are to do with individual stocks.

$Cboe Volatility Index(VIX)$ , or the Chicago Board Options Exchange’s Volatility Index, is derived from the prices of SPX index options and generates a 30-day forward projection of volatility. When elevated, it shows greater fear of the future returns of the market. On Monday this week it closed at 28 – the highest point of 2025 to date, as tariffs have bred increased volatility and unpredictability of what is to come.

The ratio of put options to call options on any day (the CBOE Total Put-Call Ratio), if above 0.7, is deemed bearish and on Monday the ratio closed at 0.92, which is historically very high.  We will watch to see whether the S&P 500 can rally from all these negative indicators but from our experience any bear market rally may be short lived or false.

The word stagflation has been bandied around recently with low growth and sticky inflation being stressed by many commentators.  Today’s economic release of February’s inflation numbers were a surprise to the downside with the year on year inflation rate of 2.8% versus 2.9% forecast and 3% previously.

Next Tuesday’s retail sales numbers are likely to be weak as consumers sit on their hands in light of the uncertainty that exists and come before the 6 weekly Federal Reserve interest rate announcement next Thursday morning at which the market is predicting a 98% probability that the Fed Governors will also sit on their hands and leave US rates unchanged.  The CME Fed Watch Tool is also now predicting 3 rate cuts (June, September and December) so it will be interesting to see whether the Fed Dot-Plot also changes in line with market sentiment.

The following table shows the 1 day, 5 day and year to date performance of the Top 10 stocks in the $S&P 500(.SPX)$ .

About Greg Boland

Greg Boland is the Chief Strategy Officer for Tiger Brokers. His more than 35 years of specialist experience in capital markets include exchange management, investment advisory management, surveillance and risk and compliance, operations, and governance, and he is an authority in trading systems and methodologies (including online), exchange-traded equities and derivatives, equity options, index futures and options, and financial futures.

About Tiger Brokers in Australia

Tiger Brokers (Nasdaq: $Tiger Brokers(TIGR)$ ), founded in 2014, is a leading online brokerage firm with a focus on redefining global investing with technology for the next generation. Our unwavering mission of helping everyday Aussies, from beginners to experts, take full control of their investing journey and bringing our local knowledge and industry-leading share-trading platform to every investor.  Currently, Tiger Brokers serves over 10 million users and more than  2 million account holders worldwide on our flagship platform Tiger Trade, with 69 licenses and qualifications in different markets. In 2019, the company was listed on Nasdaq as UP Fintech Holding Limited under the ticker TIGR. For more information about Tiger Brokers, please visit https://www.tigerbrokers.com.au.