Trump Tower of Babel

A pre-market Truth Social post by President Trump saw an abrupt and sharp upside reversal in equities to dovetail the downside move in oil. While the veracity of the actual content of Trump's post remains under scrutiny, as far as whether or not legitimate representatives of Iran are in communication with him working towards some type of diplomacy, stocks are still mostly higher as I write this albeit well off their morning highs. 

Still, the S&P 500, Nasdaq (QQQ ETF), and a prominent name like NVDA all found resistance at their respective 200-day moving averages today, thus far. Furthermore, Micron and Sandisk, easily two of the biggest winners in recent months as they took the crown as market leaders, are suspiciously red and suffered immediate and pronounced selling off the opening pop. 

Overall, this market is the epitome of a headline-driven tape. Trump's fingertips, firing off a post at a moment's notice, have proven time and time again to jolt virtually all major asset classes in a given direction. That said, one has to wonder, especially if it turns out that we are no closer to actual diplomacy than we were over the weekend, if the market eventually becomes numb to the constant jawboning and posturing. 

Again, this is all happening as the senior indices operate just below their 200-day moving averages--Rally failure here would certainly be a bearish development, especially given the promise this morning of the bellicose nature of both sides abating in the near-term. 

Elsewhere, the gold ETF (daily chart, below) still has not tested its own 200-day moving average (yellow line) since November 2023. That is an epic, historical run by any standard, but one without full-blown retail euphoria yet by a long shot. We have noted this streak previously, both here and with Members. And I still think we test it this spring. In fact, I suspect we undershoot it down to the $360s to probe support from last autumn. 

However, my long-term outlook on gold (and the precious metals/miners) remains wildly bullish. What we are witnessing now is simply an overdue bull market correction. I fully expect the next leg higher in gold to bring in more institutional money finally becoming acclimated to a large allocation of gold in client portfolios (retail euphoria comes much, much later down the road).