🩸 The Close Was Worse Than the Open
Since this morning's post at 10:40 AM ET, things went from bad to ugly. What was a manageable selloff turned into a full rout by the afternoon. Final damage:
- Dow: -793 points (-1.73%) to 45,166 — officially in correction territory now. Not flirting. In it.
- S&P 500: -1.67% to 6,368 — seven-month low, fifth straight weekly loss
- Nasdaq: -2.15% to 20,948 — deeper into correction, QQQ closed at $562.58
This morning I wrote that the Dow was "flirting" with correction. It stopped flirting and moved in. Five consecutive losing weeks for the major indexes — a streak we haven't seen since 2022. And the selling accelerated into the close, which is the part that should worry you. That's not profit-taking. That's people heading for the exits before the weekend.
🛢️ Oil Just Closed at $100. Let That Sink In.
WTI crude closed at $99.64, up 5.46% on the day. Brent settled at $112.57. Both are the highest closes since July 2022 when the Russia-Ukraine shock was at its peak.
The catalyst that broke things open this afternoon: the IRGC formally declared the Strait of Hormuz closed to vessels going to and from ports of the U.S., Israel, and their allies. Two Chinese container ships got turned back today. China — supposedly on Iran's exception list. If Beijing can't get through, nobody can.
And then Macquarie dropped the bomb: $200 oil if the war drags to June with the strait staying shut. That's not a fringe call from a crypto bro on Twitter. That's a major investment bank putting a number on the worst case. Nearly 18 million barrels per day of flow disrupted. Close to 500 million barrels of total liquids lost so far.
This morning I wrote about oil above $110 Brent. By close, WTI is knocking on triple digits and the strait situation got materially worse. The weekend risk here is enormous.
📊 The Constructive Signal Was a Head Fake — For Now
This morning's headline was the score pushing to 5.26 (Constructive) at 10:32 AM ET. That was real. But by 11:23 AM it had pulled back to 5.23, and as of the after-hours update at 8:09 PM ET, it sits at 5.22 — solidly back in Neutral territory. 30% QQQ / 70% Cash.
The afternoon's selling pressure was enough to knock the score back down. It tested Constructive, got rejected, and retreated. That's not the model failing — that's the model responding to price deterioration in real time. When QQQ drops another 1% after you've already entered a position, you pull back. That's disciplined trading.
The bigger picture still holds: the score went from 5.14 on Sunday to 5.26 this morning to 5.22 at close. The trajectory over the week is still upward, even if today's intraday push faded. QQQ at $562.58 is now a full $43.89 below the 70-day EMA of $606.47. That gap is getting wider by the day.
💻 Nvidia Below the S&P on Forward P/E — Read That Again
Here's something that got buried under the oil headlines: Nvidia's forward P/E dropped below the S&P 500's for the first time in years. The stock closed at $167.46, down 2.21%, with a forward P/E around 20.8x. The company that was trading at 40x forward earnings six months ago is now cheaper than the index on a forward basis.
That's either the buying opportunity of the decade or the market telling you that the AI growth narrative is cracking under the weight of $100 oil and no rate cuts on the horizon. I lean toward the former, but not yet. When oil is this hot and rates are this sticky, even cheap valuations can get cheaper. Nvidia at 20x forward with $78 billion in expected quarterly revenue is objectively cheap. The problem is "objectively cheap" doesn't matter when the macro is in a blender.
This is exactly the kind of dislocation the score will eventually pick up on. If tech gets oversold enough relative to its fundamentals, the price side of the equation will drag the score higher — even with ugly macro. We're not there yet at 5.22. But we're closer than we were a week ago at 5.14.
🎯 Bottom Line: Weekend Risk Is the Real Story
Here's what I'm actually thinking about heading into the weekend: this market is now priced for bad, but not priced for catastrophic. $100 oil is bad. $200 oil is catastrophic. The Dow in correction is bad. A full bear market is catastrophic. We're in the "bad" zone, and the score at Neutral reflects that — not panicking, not buying aggressively, just sitting mostly in cash.
The weekend risk is binary. Either something de-escalates with the strait (unlikely given today's IRGC declaration), or we gap down Monday on continued deterioration. The selling into the close tells me institutional money doesn't want to hold risk over the weekend. I don't blame them.
This morning I said the score was climbing a wall of worry. By close, the wall got taller. The score retreated from Constructive back to Neutral, and that's the honest read — the model tested risk-on and pulled back. April 6 is still the date to watch. But between now and then, cash is king, and 70% of it is exactly where you want to be.