📊 Score Locked at 5.13 — Second Straight Day of Defiance
Yesterday I told you the score dropped to 5.13 (Cautious: 40% SQQQ / 60% Cash) while the market rallied 1%. Today the S&P added another 0.25%, the Nasdaq tacked on 0.47%, and the score's response? Absolutely nothing. Still 5.13. Still Cautious. Still saying 40% SQQQ / 60% Cash.
The model has been bouncing between 5.12 and 5.13 since Monday morning. It dropped from 5.16-5.17 (Neutral) over the weekend and hasn't looked back. Two consecutive days of green tape, and the score won't even flirt with returning to Neutral.
QQQ closed at $603.31, still $5.02 below the 70-day EMA of $608.33. Below the EMA means no override — we follow the score directly.
Final Recommendation: 40% SQQQ / 60% Cash
Two green days don't make a trend. The score knows that. The question is whether the market does.
🏦 The Main Event: Fed Meeting Opens With $100 Oil Hanging Over Everything
The FOMC kicked off its two-day meeting today, and the decision tomorrow is the most boring non-event in recent memory: 98.9% probability of a hold at 3.50-3.75%. Nobody's debating that.
What actually matters is the dot plot — the quarterly Summary of Economic Projections. Back in January, the Fed was projecting two cuts in 2026. That was before the Iran war sent Brent crude above $100 and gasoline up 80 cents in a month. The question everyone's asking: does the dot plot still show two cuts, or does oil rip that away?
Powell's press conference tomorrow afternoon is where the real action happens. He has to thread an impossible needle: acknowledge the inflationary impact of $100+ oil without sounding so hawkish that he tanks markets, while also not sounding so dovish that he looks like he's ignoring a supply shock. Good luck with that.
Markets basically shrugged today because nobody wants to make a big bet ahead of tomorrow's fireworks. The 0.25% gain on the S&P feels more like positioning shuffling than conviction.
🛢️ Week Three of the Iran War: Oil Won't Let Go
Just when you thought oil might cool off — WTI dropped to $95.50 yesterday — it came roaring back today. U.S. crude climbed 2.6% toward $96, and Brent pushed above $100 again with a 3% gain. The Strait of Hormuz disruption is choking 20% of global oil supply and there's no end in sight.
Let's put this in perspective:
- Oil was $70 before the war started. Now it's $96-100+.
- Gasoline is up $0.80/gallon in a month
- Diesel just hit $5/gallon, up $1.34 from last month
- LNG prices have surged 60% since the conflict began
- The IEA released its largest-ever strategic oil reserve — 172 million barrels from the U.S. SPR alone
This is the backdrop against which the Fed has to decide monetary policy. The economy isn't overheating — it's being hit by an external supply shock. Rate cuts won't bring oil down. Rate hikes won't either. The Fed is a passenger in this car.
📈 St. Patrick's Day Bounce: Tech Leads, But It's Thin
Today's market action:
- S&P 500: +0.25% to 6,716
- Nasdaq: +0.47% to 22,480
- Dow: +0.10% to 46,993
Winners were selective. Micron (MU +4.4%) rallied ahead of earnings on memory chip demand hype. Uber (+4.3%) popped on an extended robotaxi partnership with Nvidia. Qualcomm (+1.7%) announced a $20 billion buyback. Goldman Sachs (+2.6%) led the Dow.
But zoom out and this is still a market in a three-week losing streak trying to find a bottom. Two days of 0.25-1% green after weeks of red isn't a reversal — it's a dead cat stretching its legs. The S&P is still well below where it was before the Iran conflict escalated, and nobody's rushing to buy risk with the Fed decision and a shooting war as the backdrop.
Retail sales did come in positive — the fifth consecutive monthly gain — but that data is from February, before oil prices really exploded. The consumer was holding up. Key word: was.
🎯 My Take: The Score Is Betting on the Fed's Problem
Here's what I think the model is seeing that the market is choosing to ignore: the Fed is trapped.
If oil stays above $100 and the dot plot acknowledges higher inflation, rate cuts get pushed further out. That's bearish for growth stocks and especially for tech. If the Fed pretends oil isn't a problem and keeps the two-cut projection, the market rallies short-term but inflation expectations unanchor and we have a bigger problem in Q3.
The score at 5.13 is essentially saying: "The economic fundamentals are deteriorating faster than the rally suggests." GDP just got revised to 0.7% on Friday. Oil is a $96 tax on every American consumer and business. Diesel at $5 means everything that gets trucked — which is everything — costs more. And the war is in week three with no ceasefire in sight.
Is the score "missing" a two-day bounce? Sure. But it wasn't built to catch two-day bounces in downtrends. It was built to tell you when the economic foundation under the market is cracking. And right now? The cracks are getting wider.
⚠️ Bottom Line: Tomorrow Is the Real Test
Today was a holding pattern. The real fireworks come tomorrow at 2:00 PM ET when the Fed drops its decision, dot plot, and economic projections, followed by Powell's press conference at 2:30 PM.
The score is planted at 5.13 (Cautious). QQQ is below its EMA 70. The model says stay defensive. If Powell surprises dovish tomorrow, maybe the market rips and the score looks wrong. If the dot plot removes a rate cut, it's going to feel like the score called it again.
Either way, sitting in 40% SQQQ / 60% Cash ahead of the most consequential Fed meeting since the war started feels like the adult thing to do. Sometimes the best trade is the boring one.