It’s finally here, and markets aren’t too optimistic as the session gets under way.  It’s the last chance to position for whatever chaos is about to ensue – which, for many investors – means taking defensive positions.

It was hard to get very excited about yesterday’s reversal, as SPY never could push past a backtest of the flag pattern which broke down last Friday.

Incidentally, I was curious about the origin of the word “tariff.” The Wikipedia page is interesting, and includes a snippet of what pretty much everyone outside of the White House thinks:

There is near unanimous consensus among economists that tariffs are self-defeating and have a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on economic growth

continued for members…

Nothing is supposed to be announced until after the close, so today’s session should reflect traders’ expectations more so than long-term investors.

One chart we haven’t looked at in a while is XLK – the tech ETF. While the purple .786 is a perfectly good reversal spot, the 1.272 is perfectly aligned with the 2022 highs which were obviously never backtested. It would represent a 15% decline from yesterday’s close and a 27% decline from the Feb highs.

While the logical spot for a backtest would be around Oct 1 when the .236 line of the big white channel passes through176.98, no one would be surprised if it happened over the next few days – assuming the tariffs are as bad as everyone expects.

Currencies continue to muddle along, with major moves probably coming – but anyone’s guess as to how far in which direction. Good time to be on the sidelines.

Oil is still contained, though creeping higher, but RB continues to slowly break out. Note that it has not been enough to offset the steady, fear-induced decline in the 10Y.