Volatility

- Fallacies do not cease to become fallacies because they have become fashion.

- G.K. Chesterton

Beware the Ides of March

Somehow, someway, the expression always seems to come back to haunt us. The world is rocked (read volatility) by many wars. People are experiencing "Black Rain." The geopolitical quagmire gets more entangled every day. Shakespeare had such a deep understanding of the human mind (tangle web we weave). We could use some of his insight. Fortunately, we have charting to help us navigate the market and hope cooler heads prevail in the world situation.

Market

All three indexes were down for the week as well as for the month. One very big note is the S&P 500 dropped lower than its December low. This is very bearish. History says this index will fall another 10% when this happens. We said last week that it could test 6500. This call is looking very good. 

The industrials made another low. We also stated last week that it coud test 45,500. This too is looking very possible.

The transports are aiming to test 17,000. These are bottom line stats. The real problem is the internal action of the market. There were a thousand point swings. There were other less known reports like the one from Moody's Rating Service. They downgraded a high flyer, Salesforce to A2. We told you about investors demanding their money back from investment firms. Blue Owl has been cut in half. The giant, Blackrock is now limiting withdrawals. One of the main reasons and worries connected to this aspect is leverage. The borrowers to private credit firms are overleveraged. These lenders may be over leveraged themselves. What about the regulators, you ask? As usual, they sit on their brains. They don't rock the boat. Then, we saw more reports like Papa Johns closing 300 stores and a EV battery maker, SK laying off 1,000. Not good.

Putting the three indexes together reinforces our January market call. At first, we saw a drop in mid-February to which we amended to mid-March. Sadly, we are correct.

Some Truth

The recent government reports have been more truthful. Unemployment ticked up and GDP came in for the 1st quarter at .07%. For the year 2025, it was 2.1%. This is down from 2024 which was 2.8%. We stated back in 2022 that our economy was in what we called, "Stealth Recession." We gave it a name because we were the only one to declare that we were suffering stagflation. This is the worst type of economy. It means that inflation is higher than our growth. It means our standard of living is dropping. It indicates that we are becoming poorer.  

The outlook is not pretty. The BS "core" inflation that the Fed uses rose .04%. This equates to 4.8% on a yearly projection. No need to mention oil, but of course, the Fed does not include that in its phony matrix inflation formula. We will hear from them later today. Oil will face resistance at $100 a barrel.

King $Dollar

Even with all the bad points above, the dollar has risen a monster 5-points in a month. It closed over 100 last Friday. This is resistance. This move does fight inflation, but going forward, espcially with  inflation, will not last. It will hurt everyone when the dollar falls. Dear Reader, it will fall, especially if the Fed surprises everyone with a rate cut today. However, we do not see that happening. This none action will only put the pressure on the new chairman...Peace.