Today's number is... 28.5

My 'Fear or Strength' model has shifted into tactical bullish mode because the Volatility Index (VIX) is above 28.5.

Here’s the chart:

Let's break down what the chart shows:

• The black line in the top panel is the S&P 500 index price.
• The green shading highlights the model is in bullish mode.
• The red shading highlights the model is in bearish mode.
• The black line in the middle panel is the 10-day average of the NYSE+NASDAQ net new high advance-decline line - The model's ‘strength’ component. The gray shading represents the AD line is rising.
• The black line in the bottom panel is the Volatility Index, which is the model's ‘fear’ component. The gray shading represents the VIX reading above 28.5.

The Takeaway: The ‘fear’ component of this model has been triggered as the VIX reading is above 28.5. 

But why is the 28.5 threshold...

Today's number is... -4%

The S&P 500 posted back-to-back -4% down days last week. 

Here’s the chart:

Let's break down what the chart shows:

• The black line is the S&P 500 index price.
• The red lines highlight the days the S&P 500 posted back-to-back -4% down days. 

The Takeaway: At the end of last week, we experienced some significant daily declines. On Thursday, the market fell by 4.8%, and things worsened on Friday, with a decline of 5.9%. 

When we take a look at the data, consecutive days with drops of -4% or less are relatively rare. However, this kind of weakness in a bear market could indicate that the worst may be behind us.

It's important to keep in mind that the sample size is small, so we should approach this information cautiously. Nonetheless, historical data tells us that after such big back-to-back declines, future returns tend to be very strong.

On average, one year later, stocks typically rise by over 30%. 

Do you view this data as...

Today's number is... -20.8%

The average stock in the S&P 500 is currently in a bear market, with a decline of -20.8%.

Here’s the chart:

Let's break down what the chart shows:

• The blue line in the top panel is the S&P 500 index price.
• The red line in the bottom panel shows the average 52-week drawdown of S&P 500 Stocks.

The Takeaway: Yesterday, the S&P 500 experienced a massive decline, dropping by 4.8%. This marks the largest one-day decline for the index since June 2020.

2025 has been quite the ride so far. In early February, the S&P 500 was at all-time highs. However, just 31 trading days later, the index is down over -12%. 

And right now, the average stock in the S&P 500 is in a bear market… Down -20.8%

If you took the time to look under the hood, you'd see that most stocks have not been rising for a while. While some stocks have performed well, the majority have not.

Breadth has been telling us that the market was weak… 

And yesterday things got worse…...

Today's number is... 639

The S&P 500 has gone 639 consecutive trading days without a -3% decline.

Here’s the chart:

Let's break down what the chart shows:

• The blue line in the top panel is the S&P 500 index price.
• The black lines in the bottom panel indicates the number of consecutive days since the S&P 500 experienced a daily move of -3% or less.

The Takeaway: As I write this daily note, the S&P 500 futures are down over 3% after Trump imposed tariffs on most countries around the globe last night.

The last time the S&P 500 experienced a drop this significant was 639 trading days ago, which was during the cost-of-living crisis in 2022.

Since the beginning of the 1990s, there have been 104 days with a change of -3% or less, with most of these down days happening while the market was in a sizeable drawdown.

When examining the S&P 500's forward returns, we find that on days with a decline of -3%, there is only a 55% chance the market will be positive two weeks later.

As...

Today's number is... 4

Here is a four-panel chart showing the recent strength of gold and its outperformance versus the other main asset classes.

Here’s the chart:

Let's break down what the chart shows:

• The yellow line is the Gold ETF index price.
• The blue line is Gold relative to Bonds.
• The gray line is Gold relative to Stocks.
• The black line is Gold relative to Commodities.

The Takeaway: If you didn't know already, we’re in the midst of a massive gold rush.

Gold has been an outstanding place for your money since breaking out of its multi-year base in early 2024.

The new absolute and relative highs we’re seeing are signals of strength, not weakness. 

When the lines go from the lower left to the upper right, we call those uptrends.

Right now, gold is at fresh all-time highs on an absolute basis, and it’s showing remarkable strength with 4-year highs relative to US stocks. Additionally, gold is achieving new all-time highs relative to bonds, and it’s also making 4...

Today's number is... 22

My Risk-On/Risk-Off ratio has reached a 22-month low, dropping below a key level that acted as resistance in 2021/22, which transformed into support from 2023 to the present.

Here’s the chart:

Let's break down what the chart shows:

• The black line is my Risk-On/Risk-Off ratio.
  • The Risk-On components consist of Copper (HG1), High Yield Bonds (JNK), Aussie Dollar (AUDUSD), Semiconductors (SOXX/SPY) & High Beta (SPHB/SPY).
  • The Risk-Off components consist of Gold (GC1), US Treasury Bonds (TLT), Yen (JPYUSD), Utilities (XLU/SPY) & Staples (XLP/SPY).
• If this ratio rises, the numerator (risk-on) is outperforming the denominator (risk-off); if it is falling, the denominator (risk-off) is outperforming the numerator (risk-on).

The Takeaway: The message right now continues to be… we are in a Risk-Off environment. 

This looks to be a pivotal moment for the US stock market. With this key level now broken, it reinforces the weak market conditions I’ve been...

Today's number is... 3

Three of my key Risk-On/Risk-Off ratios are reaching new lows.

Here’s the chart:

Let's break down what the chart shows:

The blue line in the top panel illustrates the relative ratio of High Beta vs. Low Volatility. In the middle panel, the gray line represents the relative ratio of High Yield Bonds vs. Treasury Bonds. Lastly, the black line in the bottom panel depicts the relative ratio of Equal Weight Consumer Discretionary vs. Equal Weight Consumer Staples.

If these ratios rise, the numerator (risk-on) is outperforming the denominator (risk-off); if they are falling, the denominator(risk-off) is outperforming the numerator (risk-on).

The Takeaway: These three ratios are my go-to favorite Risk-On/Risk-Off barometers: High Beta vs. Low Volatility, High Yield Bonds vs. Treasury Bonds, and Equal Weight Consumer Discretionary vs. Equal Weight Consumer Staples.

In healthy bull markets, these ratios move up and to the right on the chart.

Right now, they are not…

They are moving lower...

Today's number is... -0.2%

As we near the end of the first quarter of 2025, the average stock in the S&P 500 has a negative return of -0.2% year to date.

Here’s the table:

Let's break down what the table shows:

Each row in the table represents the average stock within each S&P 500 sector. The first column shows the average year-to-date percentage. The second column reflects the average percentage relative to the 50-day moving average. The third column indicates the average percentage relative to the 200-day moving average. The fourth column displays the average percentage from the 52-week high, while the fifth column shows the average percentage from the all-time high.

The Takeaway: The average stock within the S&P 500 index has dropped by -0.2% year-to-date. Among the sectors, the average energy stock is performing well, showing an increase of 7.2%. In contrast, the average technology stock is struggling, down by -5.1% year-to-date.

Overall market leadership has become increasingly narrower in Q1 of 2025. 

In a healthy bull market, stocks typically...

Today's number is... 20

Today marks the 20th day this year that the S&P 500 has seen a daily change of +/- 1%.

Here is the table listing the years with 20 or more +/- 1% daily changes in the first quarter:

Let's break down what the table shows:

The first column displays the years when the S&P 500 saw 20 or more daily changes of +/- 1%. The second column indicates the total count of these daily changes in the first quarter. The third column represents the return for each year. At the bottom, there is a statistical table.

The Takeaway: Volatility often results in significant market movements in either direction. Historically, these large daily fluctuations tend to cluster together during periods of market weakness.

We have done the math, and the stock market generally tends to perform better when the environment is quiet: When the S&P 500 moves less than 1%, and strong: When the stock market has 52-week new highs that are greater than new lows. Right now, the environment is noisy: The S&P 500 is moving...

Today's number is... 24

We have experienced 24 consecutive days where the number of 52-week new lows on the NYSE + NASDAQ exceeds the number of 52-week new highs.

Here’s the chart:

Let's break down what the chart shows:

• The green and red candlesticks in the top panel is the S&P 500 index price.
• The green and red lines in the middle panel is the NYSE + NASDAQ 52-week new highs - 52-week new lows.
• The red shadings in the bottom panel shows the consecutive days with NYSE + NASDAQ 52-week new lows > 52-week new highs.

The Takeaway: Bulls are making a strong effort following the recent market correction. However, NYSE + NASDAQ 52-week new lows are still lingering. This marks the highest level of consecutive days of new lows outpacing new highs we've seen since the last 10% market correction back in October 2023. This is the third longest period of consecutive days with NYSE + NASDAQ new lows > new highs during this current bull market. 

But, the Bulls have completed the first stage...

Today's number is... 27%

Only 27% of S&P 500 sectors are currently above their 50-day moving average.

Here’s the chart:

Let's break down what the chart shows:

• The blue line in the top panel shows the price of the S&P 500 index.
• The red line in the top panel shows the 50-day moving average of the S&P 500 index.
• The black line in the bottom panel shows the percentage of S&P 500 sectors above their 50-day Average.

The Takeaway: As of yesterday's close, only 27% of S&P 500 sectors are currently trading above their 50-day moving average… In short, this breadth reading needs to improve sooner rather than later, as the S&P 500 typically faces challenges when the majority of sectors are below their 50-day moving averages. 

The 10% correction we experienced in late February into early March caused some damage to the intermediate trend. However, over the past seven trading days, we have seen a resurgence of bullish activity, with the S&P 500 index climbing over 4%. While...

Today's number is... 10

S&P 500’s price is currently trading under its 10-month moving average.

Here’s the chart:

Let's break down what the chart shows:

• The black line is the S&P 500 index price.
• The red line is the 10-month moving average of the S&P 500 index price.
• The gray lines highlight when the price is above the 10-month moving average.

The Takeaway: With just six trading days left in the month, there's one model I'm paying close attention to. The bulls need to work hard to push the S&P 500 price back above its 10-month moving average. At the moment, the S&P 500 is 1.7% below this moving average. If the price stays below it, this could create challenges for stocks.

I have done the math… Take a look at the table on the chart.

If you've been following me for some time, you know that I like to know what type of market environment we’re in. One of the simplest strategies I use for assessing the longer-term environment is: If...