EB Daily Market Report - Thursday, March 13, 2025

Dear Members.

I want to pass along some thoughts from Tom.

"I haven't had much time to look at the market the past couple days, but I have just reviewed many of my every day charts and I am looking to put money back to work - but only in ETFs (SPY, QQQ, IWM).  If you're VERY aggressive, you could consider the 3x leveraged ETFs like the TQQQ for the NASDAQ 100 or the TNA for the Russell 2000 (IWM), but please keep in mind if the selling resumes or even intensifies, these leveraged investments will lose value VERY quickly. 

I'd suggest fairly tight stops be used n the SPY, QQQ, and IWM and their related leveraged products.  I'd pick out a stop that guarantees you won't lose more than $XXX or XXX%, whatever that number or percentage is for each individual.The primary reason I'm looking for a potential reversal is that we've tested recent lows with a VIX that's MUCH lower.  In other words, we're back to earlier lows, but with much less fear.  The other thing I like is that our sectors, relative to the S&P 500, are showing better strength now than just a few days ago.  For instance, the QQQ hit 467.01 on Tuesday, while today's low nearly reached that level at 468.17 (at my last check) - only $1 off.  The XLK:$SPX ratio, however, is much higher, suggesting that money is potentially rotating back to technology, which will certainly help the benchmark S&P 500 and even moreso the NASDAQ 100 (QQQ). 

This is absolutely NO guarantee of anything.  It simply is telling me that risks appear to be diminishing and that the odds of a more sustainable short-term rally are building.It could literally fall apart.  As I've said many times, a market where the VIX is in the 20s or higher is a VERY RISKY market.  Nothing I can do to alleviate that risk.  If the lows from Tuesday are violated by more than 0.5% or 1.0%, I'd likely take the safe route and move back to cash for now."

At your service,

John Hopkins