Market When Closed, Monday 7 April
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Back To The Future
by Alex King, CEO, Cestrian Capital Research, Inc
At today’s intraday lows in the S&P500, Nasdaq-100 and Dow Jones, it was briefly January 2022 all over again. Each of the indices briefly checked in with their three-year-old-selves before deciding they didn’t like the past very much and got back to the future sharpish. Although these are very serious times, we then saw a very entertaining rapid rally caused by one of two things (you choose!).
- "Walter Bloomberg” on X repeating the Bill Ackman argument about a 90-day moratorium on tariff implementation, subsequently denied by the Administration and/or
- A ginormous amount of S&P500 calls doing their thing and dragging the SPX around, the Nasdaq and Dow following in its wake.
It amuses me greatly to think that a single X post caused the Flash UnCrash, but I sadly think that a billion-dollar set of call buys was the more likely culprit. You can read the always-excellent Robert P. Balan on the stocks-are-merely-derivatives-of-options story, here.
Even if you think, options, boring, not for me - I would encourage you to read that note above. I can tell you that one of the many A-HA moments I have encountered along the way is learning the extent to which options drive equities and not vice-versa. If you invest in and/or trade stocks and you haven’t gotten to grips with this yet, you are missing a whole domain from your analysis - and this missing domain will cause you to make unforced errors. If this piques your interest, don’t forget to check out SpotGamma, whose founder Brent Kochuba actually succeeds in making this stuff interesting as well as valuable. (This depends on your definition of ‘interesting’ of course. I don’t get out much.)
Well, we should get into the charts. Before we do, it would be remiss of me not to highlight what I think is our fastest-growing service launch to date. Because, you know, we are here to help and all.
This Is Our Quant.
Subscribers to our SignalFlow AI family of services have been very happy of late. Here’s three testimonials we received after the current market turmoil.
- "I am wildly thrilled with SignalFlow AI for $SPY! I have been following the signals and moved almost completely to cash with the most recent change to risk off. Absolutely incredible for me, mentally and financially. Thanks so much to the team for developing this service.” - April 2025
- “The long/short service paid for itself in one day overnight by the way! Thankyou.” - April 2025
- “Rather than a day that could have ruined the weekend, I was able to watch the market tank knowing that I had the knowledge to weather the storm and come out far ahead.” - April 2025
The latest SignalFlow service provides long/short signals for the S&P500 and Nasdaq-100. This is a very easy to use service running on a quantitative model; complex below the waterline, simple above it. This is pure machine logic driven by price alone, not by the news, not by narrative, not by fear or greed.
Please do take a moment to read about what I believe to be a truly excellent service - here.
Alex King
Short- And Medium-Term Market Analysis
If you want this daily dose of pattern recognition, and you aren’t yet a subscriber of course, you can read about and choose from all the subscription services that include this note, here.
US 10-Year Yield
Yesterday I said of the 10yr yield - "This pattern suggests the most likely next move, by the way, is for the yield to now rise. If so we will start to measure that next move in the usual way". And yea verily did the 10yr promptly make like a meme stock all day! At the time of writing (2100 Eastern) the yield is falling with a little gusto. This is the chart on the wall behind Secretary Bessent’s desk; to the extent the 10yr falls, Mr. Bessent will be deemed a success, and the contrary is also true. I myself expect the 10yr to drop lower over the next 1-2yrs, not in a straight line.
Equity Volatility
The first signs of a vol crush. It’s still elevated as you can see. One crazy and slightly green day does not the end of a crisis make.
Disclosure: No position in volatility-linked securities.
Now, for our paying subscribers we move on to bonds, the S&P500, the Nasdaq, the Dow, and key sectors.