📉 Five Weeks of Pain and Counting
Friday morning and the bleeding has not stopped. S&P 500: -0.89%. Nasdaq: -1.25%. Dow: -0.45% and briefly dipping into official correction territory before bouncing. The Nasdaq has been there since yesterday — down 10% from its October high. This is the fifth consecutive losing week for the major indexes, a streak we have not seen since 2022. Remember 2022? That was fun.
The catalyst today is a cocktail of misery. Brent crude punched above $110, up 2.7% on fresh Strait of Hormuz incidents. The 30-year Treasury yield surged to 4.978% after this morning's PCE data came in sticky — inflation is not cooperating. And Trump's 10-day deadline extension to April 6? The market looked at it, shrugged, and kept selling.
Here is the ugly truth: the average Nasdaq stock is down 31% from its highs. The index-level 10% correction is actually flattering. Under the hood, this has been a bear market for most names since January.
📊 The Score Just Did Something Interesting
After spending the entire week glued to the 5.14-5.17 range — Neutral with a side of boredom — the score made its first meaningful move this morning. It opened at 5.16 at 9:10 AM ET. Normal. Then at 10:32 AM ET, it jumped to 5.26.
That is Constructive territory. 80% QQQ / 20% Cash. The first time the score has crossed above 5.25 since before the war escalated. While every headline screams doom and the Dow is flirting with correction, the model is quietly adding risk.
It pulled back slightly to 5.23 at 11:23 AM ET — back to Neutral — but the direction is clear. The score has gone from 5.10 on Tuesday to 5.26 on Friday morning. That is a steady grind higher through five days of relentless selling. Something is shifting underneath the surface.
QQQ at $566.96 sits a full $39.64 below its 70-day EMA of $606.60. No override — price is well below the EMA, so we follow the score directly.
Current Recommendation: 30% QQQ / 70% Cash (Neutral at 5.23) — but watch for a sustained push back above 5.25
🧮 Why the Score Is Getting Bullish When Everything Looks Terrible
I know what you are thinking. "The world is on fire, oil is at $110, the Dow is in correction, and the score is going up? Is it broken?"
No. This is exactly what the score is designed to do. Remember: the model balances two forces equally — macro data and price. The macro side is ugly. We all know that. War, oil shock, sticky inflation, no rate cuts until at least 2027. That half of the equation is screaming caution.
But the price side is telling a different story. QQQ has dropped nearly 7% this month. The average Nasdaq stock is down 31%. The market has priced in a catastrophe. The question the score is asking is: has it priced in MORE than the actual catastrophe warrants?
And the answer, apparently, is starting to look like yes. Everything has a price. If the macro deteriorated 10% but the market dropped 20%, you are getting paid to take risk. The score is detecting that dislocation — the selloff has overshot the data. Not by a lot, not yet. Hence why it is hovering at the Neutral/Constructive border rather than screaming "go all in." But the direction of travel matters.
This is not the score being wrong. This is the score doing its job — finding the floor where risk/reward starts to flip.
🛢️ Oil Above $110 and the Hormuz Question
Trump extended the Iran deadline to April 6. Markets do not care anymore. Brent ripped to $110.94 this morning, WTI hit $97.01, and gold is sitting at $4,421 because apparently the only safe asset left is a shiny rock.
The Strait of Hormuz situation actually got worse overnight, not better. Reports of Iranian forces turning back Chinese vessels — from a country that was supposedly on the "allowed" list after Iran's selective reopening announcement. If Iran cannot even maintain its own exception list, the strait is functionally closed to everyone.
Here is where it gets really uncomfortable: yesterday was the worst single session since the war began. S&P dropped 1.74%. And today is shaping up to extend the pain. Five straight weeks of losses, oil grinding higher, and the only "positive" catalyst is a deadline extension from a president whose previous deadlines have all been meaningless. The peace trade is not just dead — it is decomposing.
🎯 My Take: The Contrarian Signal Is Forming
Everyone is bearish. Every headline is negative. The Nasdaq is officially in correction, the Dow almost there, oil is parabolic, and the PCE says inflation is not going anywhere. This is the exact environment where you are supposed to start paying attention to the other side of the trade.
I am not saying buy everything today. The score is not saying that either — it is at 5.23, mostly cash. But the fact that it briefly touched Constructive this morning while the market was actively selling off tells me something: the model sees a price floor forming. The data is bad, but the market has already priced in "terrible." If the data comes in merely "bad," that is actually bullish relative to expectations.
Watch April 6. That is the next real catalyst. Either Iran makes meaningful concessions on the strait, or Trump escalates with energy infrastructure strikes. Binary outcome. The score grinding higher into that date suggests the model is positioning for the former, or at least for a relief rally on the uncertainty clearing.
The worst time to get bearish is when everyone already is. I am not calling a bottom — the score will do that for me. But I am saying: do not chase the panic. The model has been right all week with Neutral, and now it is slowly walking toward risk-on. That is worth watching.
⚠️ Bottom Line: The Score Is Climbing a Wall of Worry
Five weeks of losses. Nasdaq in correction. Oil above $110. Sticky PCE. No peace deal in sight. And in the middle of all of it, the Edge Of Markets score just made its first push into Constructive territory since this whole mess started.
The market sees fire. The score sees price. One of them is right. Current position: Neutral at 5.23 — 30% QQQ, 70% Cash — but the model is leaning forward for the first time in weeks. April 6 is the date. The score might get there first.