🕊️ One Day. That's How Long the Ceasefire Lasted.
Twenty-four hours ago, the world exhaled. Trump announced a two-week ceasefire with Iran at the 8 PM deadline. Oil crashed 15%. Futures ripped 3%. QQQ gapped $22 to open at $607.87. The Dow had its best day in a year. Airline stocks surged. Defense names dipped. For one beautiful morning, the Strait of Hormuz was theoretically reopening and the biggest tail risk of the year was off the table.
Then Iran's parliamentary speaker Mohammad Bagher Ghalibaf went on the record: three elements of the truce were already violated — Israel's ongoing strikes in Lebanon, a drone entering Iranian airspace, and the denial of Tehran's right to enrich uranium. The ceasefire didn't even survive a full news cycle.
Oil is climbing back. WTI pushed above $102 this morning. Brent is flirting with $99. That 15% crash from yesterday? We've already given back a third of it. Markets opened flat, with QQQ at $604.43 — basically where it closed yesterday at $603.65. The relief rally is fading into a "wait, are we still doing this?" rally. The Russell 2000 is the outlier, up nearly 3%, because small caps apparently didn't get the memo about geopolitical risk.
📊 Score Grinding Lower: 5.10 and Falling
Since yesterday's three-rebalance circus (which we covered in the morning post), the score has done nothing but deteriorate. The ref sits at 5.14 from yesterday's gateway into Cautious at 10:52 AM ET, when QQQ was at $604.44.
Here's the slide since then:
- Yesterday afternoon: Bounced between 5.13-5.15 as QQQ faded from $607 to $603. No rebalance — all noise around the ref.
- Today 8:52 AM ET: Score dropped to 5.12 pre-market. Iran violation headlines hitting overnight.
- Today 9:53 AM ET: Score hit 5.10 — the lowest reading since March 25. QQQ opened at $604.43.
At 5.10, the raw signal is Cautious — 40% SQQQ / 60% Cash. The model is reading this environment and saying: the ceasefire premium is evaporating, oil is climbing back, and at these QQQ prices, the risk/reward is tilting defensive. No new economic data drove this — it's pure price action as the market digests the reality that the Iran situation is far from resolved.
The next downside trigger is at 5.04 — a gateway into High Risk (50% SQQQ / 50% Cash). That's only 0.06 away. One more bad headline could push us there. Upside? The score needs to reach 5.35 for the EMA override to hand off to Momentum. That's 0.25 away — a different universe from here.
🛡️ The EMA Override: Still Holding the Line
QQQ at $604.48. EMA 70 at $601.26. That's a $3.22 cushion.
The override is the only reason we're not short right now. The raw score says short the market. The trend filter says no — QQQ reclaimed its 70 EMA yesterday on the ceasefire gap and hasn't lost it. Final recommendation: 100% QQQ.
But here's the tension: that $3.22 cushion is thin. Yesterday QQQ opened at $607.87 and faded to $603.65 by close — a $4.22 intraday range. If today brings a similar fade, or if oil pushes back above $105 on escalation fears, QQQ could easily slip below $601.26 and kill the override. The moment that happens, the raw Cautious signal activates and you're holding 40% SQQQ. Watch the EMA like a hawk today.
📈 The Bright Spot Nobody's Talking About: Labor Market
Lost in the Iran noise: this morning's jobless claims came in at 219,000 — completely benign. But the real number is continuing claims, which dropped to 1.79 million, the lowest since May 2024. That's almost two years.
Think about what that means. We just went through a hot war with Iran, oil at $117, the Strait of Hormuz effectively closed, and the labor market didn't flinch. Companies aren't laying people off. The economy absorbed a 67% spike in crude prices and kept hiring. That's genuine resilience, and it's one reason the score hasn't dropped below 5.05 despite everything — the macro floor is still there. The question is whether tomorrow's CPI blows that floor apart.
🎯 Tomorrow's CPI: The Real Monster Under the Bed
Forget Iran for a second. The March CPI report drops at 8:30 AM ET tomorrow, and it might be the most consequential inflation print since the pandemic era.
The Cleveland Fed's nowcast is calling for a trailing 12-month inflation rate of 3.25% — that's 85 basis points above the prior report. An 85-basis-point jump in one month. When was the last time you saw that? This isn't gradual drift. This is oil-driven shock inflation. WTI went from $60 to $117 in five weeks. That flows through gasoline, shipping, plastics, food — everything.
If CPI comes in at 3.25% or higher, the rate cut narrative is dead. Not wounded, not on life support — dead. The Fed can't cut into accelerating inflation driven by a supply shock. And if rate cuts are off the table, QQQ at $604 starts looking very expensive for a market that's been pricing in easing since January.
I think this is the bigger story than the ceasefire. Iran is binary — either the truce holds or it doesn't. CPI is structural. A hot print reshapes the rate path for the rest of the year. A cool print (unlikely given the oil surge timeline) would be a massive relief valve. Either way, tomorrow at 8:30 AM is when the real fireworks start.
💡 Bottom Line: Riding the EMA Into a Minefield
The score is at 5.10 and falling. The model wants to be short. But the 70 EMA says stay long, and the trend filter has earned its keep over years of backtesting. So we ride: 100% QQQ.
But make no mistake — this is a high-wire act. The EMA cushion is $3.22. The ceasefire is already fraying. Oil is climbing back. And tomorrow morning, the CPI print could either validate the "everything is fine" narrative or blow it to pieces.
If you're positioned long right now, you're trusting the trend over the score. That's historically been the right call. But keep your eye on $601.26 — that's the line where the override dies and the model's defensive instincts take over.